Mathis v. St. Helens Auto Center, Inc. ( 2020 )

437
Submitted on the briefs May 1; decision of Court of Appeals reversed, judgment
of circuit court reversed, and case remanded to circuit court for further
proceedings December 31, 2020
Beau MATHIS,
Petitioner on Review,
v.
ST. HELENS AUTO CENTER, INC.,
a domestic corporation,
Respondent on Review.
(CC 14CV15683) (CA A161404) (SC S067064)
478 P3d 946
Plaintiff, defendant’s former employee, recovered on a wage claim in court-
annexed arbitration. The arbitrator awarded plaintiff an attorney fee under ORS
652.200(2) and costs, but the arbitrator applied ORCP 54 E(3) to limit that award
because the amount plaintiff recovered on his claim was less than the amount of
an offer of judgment that plaintiff had rejected. The circuit court and the Court
of Appeals affirmed the award. Held: (1) ORS 652.200(2), which provides that
an employee who succeeds in an action to recover unpaid wages is entitled to
attorney fees, and ORCP 54 E(3), which bars recovery of attorney fees and costs
incurred after an offer of judgment when the plaintiff ultimately recovers less
than the offer, cannot both be given effect; and (2) ORS 652.200(2) is the more
particular provision and controls.
The decision of the Court of Appeals is reversed. The judgment of the cir-
cuit court is reversed, and the case is remanded to the circuit court for further
proceedings.
En Banc
On review from the Court of Appeals.*
David A. Schuck, Schuck Law, LLC, Vancouver, Washington,
filed the briefs for petitioner on review. Also on the briefs
were Karen A. Moore and Stephanie J. Brown.
Richard B. Myers, Bennett Hartman, LLP, Portland,
filed the brief for respondent on review.
Shenoa Payne, Shenoa Payne Attorney at Law PC,
Portland, filed the brief for amicus curiae Oregon Trial
Lawyers Association.
____________
* On appeal from a judgment of the Columbia County Circuit Court, Ted E.
Grove, Judge. 298 Or App 647, 447 P3d 490 (2019).
438 Mathis v. St. Helens Auto Center, Inc.
FLYNN, J.
The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
Garrett, J., dissented and filed an opinion, in which
Duncan, J., joined.
Cite as 367 Or 437 (2020) 439
FLYNN, J.
The dispute before us arises at the intersection of
two potentially conflicting provisions that address plain-
tiff’s right to recover attorney fees from defendant. The
first is a statute, ORS 652.200(2), which provides that an
employee who succeeds in an action to recover unpaid wages
is entitled to “a reasonable sum for attorney fees” in addi-
tion to the other sums awarded in the judgment. The second
is a rule of civil procedure, ORCP 54 E(3), which provides
that a plaintiff who rejects an offer of judgment and ulti-
mately fails to recover more than the offer “shall not recover
costs, prevailing party fees, disbursements, or attorney fees
incurred after the date of the offer.” The issue is whether
ORS 652.200(2) and ORCP 54 E(3) can be construed in a
way that “will give effect” to both, in the words of the legis-
lature’s longstanding requirement for construing statutes.
ORS 174.010. If not, then whichever is the more general pro-
vision must yield to the more particular. ORS 174.020(2).
In a divided en banc opinion, the Court of Appeals
held that ORCP 54 E(3)1 can be applied to wage claims with-
out negating the effect of ORS 652.200(2) and thus that both
can be given effect. Mathis v. St. Helens Auto Center, Inc.,
298 Or App 647, 667, 447 P3d 490 (2019). The dissenting
judges reasoned that applying the limitation of ORCP 54
E(3) to claims subject to ORS 652.200(2) would conflict with
the legislative intent behind that statute and concluded
that the statute is the more specific and controls. Id. at 678(Egan, C. J., dissenting). The question is obviously a close
one that could benefit from legislative clarification, but we
are persuaded by the reasoning of the dissent and, accord-
ingly, reverse.2
1
Except as otherwise indicated, all citations to ORCP 54 E(3) in this opin-
ion are to the current version of the rule, which became effective January 1,
2016. Although plaintiff’s fee award predates that effective date, the 2016
amendment made only one, nonsubstantive change to the text of ORCP 54 E(3).
Council on Court Procedures, Amendments to the Oregon Rules of Civil Procedure
Promulgated by the Council on Court Procedures, Dec 6, 2014, 40, http://www.
counciloncourtprocedures.org/Content/Promulgations/PROMULGATED%20
A M EN DM EN TS%20T O%20OR EG ON%20RU L E S%2 0OF %2 0 CI V I L%2 0
PROCEDURE%2012-6-14.pdf (accessed Dec 22, 2020).
2
Plaintiff also challenged in the Court of Appeals the trial court’s decision
to permit the arbitrator to charge the parties a fee that significantly exceeded
the presumptive $250 fee that is set by statute for parties to mandatory
440 Mathis v. St. Helens Auto Center, Inc.
I. FACTS
The facts pertinent to our review are procedural and
undisputed. Plaintiff was employed by defendant for several
years. Defendant terminated plaintiff’s employment, and,
several months later, plaintiff filed the present action alleg-
ing that defendant had failed to pay wages that were due at
termination. In answer, defendant asserted that it had paid
all wages due and also alleged several affirmative defenses.
The case was assigned to mandatory court-annexed
arbitration,3 and defendant made an offer of judgment under
ORCP 54 E, which plaintiff rejected. The arbitrator ulti-
mately found that defendant had failed to timely pay some
of the wages that plaintiff claimed and that the failure was
willful, entitling plaintiff to a statutory penalty. In addition,
the arbitrator awarded plaintiff an attorney fee under ORS
652.200(2) and costs, but he applied ORCP 54 E(3) to limit
those awards to fees and costs that plaintiff had incurred
before defendant’s offer of judgment, because that offer of
judgment exceeded the amount that plaintiff had ultimately
recovered on his claims. Plaintiff filed exceptions in the cir-
cuit court to the arbitrator’s application of ORCP 54 E(3)
to limit the award of fees and costs, but the award was
affirmed by operation of law when the court failed to enter a
decision within 20 days. ORS 36.425(6). As explained above,
a divided Court of Appeals then affirmed the attorney fee
award, and this court allowed review.
II. DISCUSSION
The area of intersection between ORS 652.200(2)
and ORCP 54 E(3) comprises those actions for unpaid wages
in which the employee has failed to accept an offer of judg-
ment and then recovers an amount in the action that does
arbitration—in this case a fee that exceeded the value of plaintiff’s award on the
wage claim. The Court of Appeals determined that plaintiff had failed to raise
the challenge below in a way that permitted the appellate court to review it,
Mathis, 298 Or App at 652, and that issue is not before us on review.
3
The circuit courts must require arbitration “in matters involving $50,000
or less.” ORS 36.400(3). Following a decision from the arbitrator, parties to the
arbitration have an opportunity to request a trial de novo in the circuit court or to
request court review directed solely to an arbitration award or denial of attorney
fees or costs. ORS 36.425(2)(a), (6).
Cite as 367 Or 437 (2020) 441
not exceed the offer of judgment. According to plaintiff and
to the Court of Appeals dissenters, the legislative intent
underlying the mandatory fee award described in ORS
652.200(2) makes that statute inconsistent with the post-
filing opportunity that ORCP 54 E(3) offers for defendants
to limit their liability for fees. Although the legislature
sometimes specifies the result that it intends for cases that
are governed by potentially inconsistent statutes, such as
through phrases like “except as provided in [ORS—-.—-],”
see, e.g., ORS 652.150(1), or “notwithstanding ORS [—-.—-],”
see, e.g., ORS 652.230(7), the legislature has not specified
what it intends for cases that arise at the intersection of ORS
652.200(2) and ORCP 54 E(3). But the legislature has sup-
plied general statutory construction guidance for conflicts
that are not expressly resolved by the text of the competing
statutes: ORS 174.010 directs that, “where there are several
provisions or particulars such construction is, if possible, to
be adopted as will give effect to all”; and ORS 174.020(2)
directs that, “[w]hen a general provision and a particular
provision are inconsistent, the latter is paramount to the
former so that a particular intent controls a general intent
that is inconsistent with the particular.” This court has
explained how those statutory directives work together: “In
short, if the court can give full effect to both statutes, it will
do so, and if not, it will treat the specific statute as an excep-
tion to the general.” Powers v. Quigley, 345 Or 432, 438, 198
P3d 919 (2008).
Thus, the primary question is whether the com-
peting provisions can be construed in a manner that will
“give full effect to both.” Id. To answer that question,
plaintiff focuses on the degree of similarity between ORS
652.200(2) and a different fee-shifting statute that Powers
held to be inconsistent with the version of ORCP 54 E(3)
then in effect. See 345 Or at 443 (“Because ORCP 54 E pre-
vents this court from giving full effect to ORS 20.080(1),
we must treat the more specific statute as an exception to
the more general one.”). The fee statute at issue in Powers,
ORS 20.080(1), provided at that time that plaintiffs who had
made a written demand at least 10 days prior to filing a low-
value tort claim would be entitled to recover “a reasonable
amount” as attorney fees if they obtained a judgment for an
442 Mathis v. St. Helens Auto Center, Inc.
amount greater than any prefiling settlement offer from the
tortfeasor.4
The court in Powers described the “axiomatic”
inquiry “that, to determine whether we can give effect to
both [provisions], we must decide the effect that the legis-
lature intended those statutes to have.” 345 Or at 438. The
court first examined the text and context of ORS 20.080(1)
to discern the legislative intent. Id. Comparing the text of
that fee statute to the text of ORCP 54 E(3) led the court to
conclude that there is a conflict between the provisions “on
the basis of their statutory text alone.” Id. at 441. Under
ORS 20.080, the court explained, “a plaintiff is entitled to
receive attorney fees if the plaintiff satisfies certain proce-
dural requirements prior to filing the action,” while under
ORCP 54 E, a defendant is able “to cut off the plaintiff’s
right to attorney fees by making an offer of judgment after
the filing of an action but before trial.” Id. at 440. The court
also considered what its prior decisions had identified as
the “policies underlying” ORS 20.080(1), in particular the
policy of “preventing tortfeasors and their insurers from
ignoring just claims.” Id. at 439. The court determined that
the offer-of-judgment procedure spelled out in ORCP 54 E
“allows a defendant to nullify, at least in part, the obligation
to pay attorney fees that ORS 20.080(1) creates” and thereby
“undermine[s] the core purpose of ORS 20.080(1), namely, to
prevent tortfeasors and their insurers from refusing to pay
just claims.”5 Id. at 440-41. Based on that determination,
the court ultimately concluded that “ORCP 54 E prevents
this court from giving full effect to ORS 20.080(1)” and that
ORCP 54 E is the more general provision, so must yield in
cases governed by ORS 20.080. Id. at 443.
In the present case, the Court of Appeals majority
understood plaintiff’s argument to depend on an analogy to
4
ORS 20.080 was subsequently amended to require that the plaintiff provide
written notice 30 days prior to filing the action, among other changes. Or Laws
2009, ch 487, §§ 1 - 4.
5
Although this court’s statutory construction decisions do not always focus
on the legislature’s “purpose” in enacting a statute, referring to “purpose”
is one way of describing what the legislature intended. See, e.g., Lake Oswego
Preservation Society v. City of Lake Oswego, 360 Or 115, 143, 379 P3d 462 (2016)
(“One relevant aspect of a provision’s legislative history is the particular purpose
for which it was created.”).
Cite as 367 Or 437 (2020) 443
Powers, so the majority resolved defendant’s claim that the
statutes conflict by comparing the text of ORS 652.200(2)
to the text of the statute at issue in Powers, ORS 20.080(1).6
Mathis, 298 Or App at 659. The majority identified “several
important differences” between the two statutes, primar-
ily related to the majority’s conclusion that ORS 652.200(2)
lacks a “settlement window”—a term that the opinion used
to describe the prefiling waiting period that ORS 20.080(1)
creates by requiring that the plaintiff give the defendant
written notice of the claim and then wait a specific number
of days before filing the action. Id. at 659, 661-62. As a result
of the differences that it identified between the statutes, the
majority concluded that ORS 652.200(2) is not analogous
to the “particular type of statute” at issue in Powers (ORS
20.080(1)) and, therefore, must be construed in a way that
also gives effect to ORCP 54 E(3). Id. at 666-67.
We undertake a slightly different approach. Although
we agree that Powers lays out a framework to guide how we
should resolve the dispute in this case, the ultimate holding
of Powers is not the starting point. As the Court of Appeals
dissent correctly emphasized, in determining whether ORS
652.200(2) can be given full effect if ORCP 54 E(3) is applied
to wage claims, the analysis should start with identifying
the legislative intent behind ORS 652.200(2). Powers, 345 Or
at 438 (“[i]t is axiomatic that, to determine whether we can
give effect to” competing statutes, courts must determine
legislative intent behind those statutes, starting with exam-
ination of text and context); see Mathis, 298 Or App at 668
(Egan, C. J., dissenting). To determine legislative intent, we
look primarily to the text and context of the statute because
“there is no more persuasive evidence of the intent of the
legislature than the words by which the legislature under-
took to give expression to its wishes.” State v. Gaines, 346
Or 160, 171, 206 P3d 1042 (2009) (internal quotation marks
6
The majority also compared ORS 652.200(2) to a third fee-shifting stat-
ute, ORS 742.061, which the Court of Appeals has held to be in conflict with
ORCP 54 E(3). Mathis, 298 Or App at 657-58 (discussing Wilson v. Tri-Met, 234
Or App 615, 228 P3d 1225, rev den, 348 Or 669 (2010), which concluded that ORS
742.061—providing for a fee award to the insured in an action on an insurance
policy—cannot be reconciled with ORCP 54 E(3)). The question of whether ORS
742.061 can be harmonized with ORCP 54 E(3) is not before us in this case, and
we do not otherwise discuss Wilson.
444 Mathis v. St. Helens Auto Center, Inc.
omitted). That inquiry persuades us that the legislative
intent behind requiring employers to pay for the employee’s
attorney fees in a successful action to recover unpaid wages
cannot be given full effect if those actions are subject to the
fee-limiting procedure of ORCP 54 E(3).
A. The Potentially Conflicting Provisions
1. ORS 652.200(2)
The legislature first specified more than a century
ago that an employee who must bring an action to collect
unpaid wages may also recover “a reasonable sum for attor-
ney’s fees.” Or Laws 1907, ch 163, § 315. Although initially
the granting of fees was a matter of discretion for the court,
id., by 1919 the legislature had made an award of fees man-
datory. Or Laws 1919, ch 54, § 1. As that 1919 law speci-
fied, if wages (among other debts) “were not paid for a period
of forty-eight hours after proper demand for the payment
thereof,” then in an action to collect the unpaid wages,
“the court shall, upon entering judgment for the plaintiff,
include in such judgment, in addition to the costs and dis-
bursements otherwise prescribed by statute, a reasonable
sum for attorney’s fees for prosecuting said action.”
Id. (emphasis added).
That attorney fee requirement, now codified at ORS
652.200(2), has remained essentially unchanged since 1919.
The statute currently provides, in its entirety:
“In any action for the collection of wages, if it is shown
that the wages were not paid for a period of 48 hours, exclud-
ing Saturdays, Sundays and holidays, after the wages
became due and payable, the court shall, upon entering
judgment for the plaintiff, include in the judgment, in addi-
tion to the costs and disbursements otherwise prescribed
by statute, a reasonable sum for attorney fees at trial and
on appeal for prosecuting the action, unless it appears that
the employee has willfully violated the contract of employ-
ment or unless the court finds that the plaintiff’s attorney
unreasonably failed to give written notice of the wage claim
to the employer before filing the action.”
ORS 652.200(2). That text reveals several facets of the stat-
utory right. First, the right to fees is tied to the filing of an
Cite as 367 Or 437 (2020) 445
“action” that results in “judgment for the plaintiff.” Second,
the right to fees is contingent on a 48-hour prefiling waiting
period, which, in the statute’s present iteration, runs from
the date “the wages became due and payable.” Third, the
right to fees depends on whether “the plaintiff’s attorney
unreasonably failed to give written notice of the wage claim
to the employer before filing the action.” Finally, when those
requirements are met (and absent a willful breach of con-
tract by the employee), the award to an employee of “a rea-
sonable sum for attorney fees at trial and on appeal for pros-
ecuting the action” is mandatory and is “in addition to the
costs and disbursements otherwise prescribed by statute.”
This court’s prior constructions of the statute inform
our understanding of what the legislature intended by
requiring an award of attorney fees to employees who obtain
a judgment for unpaid wages. See, e.g., State v. McAnulty, 356
Or 432, 441, 338 P3d 653 (2014) (in examination of the text
in context, “[w]e also consider this court’s prior construction
of the statutes at issue”); State v. Cloutier, 351 Or 68, 100,
261 P3d 1234 (2011) (“Our analysis of [the statute] is also
informed by this court’s prior construction of that statute
or its predecessors.”). This court has repeatedly concluded
that, in requiring an award of attorney fees in a judgment
for unpaid wages, the legislature intended to give effect to
two related policies. The first is to aid employees “in the
prompt collection of compensation due,” and the second is
to “discourage an employer from using a position of eco-
nomic superiority as a lever to dissuade an employe[e] from
promptly collecting” compensation that is due. Hekker v.
Sabre Construction Co., 265 Or 552, 559, 510 P2d 347 (1973)
(quoting State ex rel Nilsen v. Ore. Motor Ass’n, 248 Or 133,
138, 432 P2d 512 (1967)); see also Lamy v. Jack Jarvis & Co.,
Inc., 281 Or 307, 313, 574 P2d 1107 (1978) (concluding that
the “central purpose” of the wage statutes—including ORS
652.200—is “that of assuring that one who works in a mas-
ter and servant relationship, usually with a disparity of eco-
nomic power existing between himself and his superior, shall
be assured of prompt payment for his labors when the rela-
tionship is terminated”). Those policies are analogous, the
cases have observed, to the policy considerations underlying
ORS 20.080. Hekker, 265 Or at 559; Nilsen, 248 Or at 138.
446 Mathis v. St. Helens Auto Center, Inc.
Other provisions of Oregon’s wages statutes, which
are set out in ORS chapters 652 and 653, supply context
that is relevant to our understanding of the legislative
intent behind the fee-shifting mandate of ORS 652.200(2).
See PGE v. Bureau of Labor and Industries, 317 Or 606, 611,
859 P2d 1143 (1993) (context of a statute “includes other
provisions of the same statute and other related statutes”).
Some of those provisions illustrate why this court has iden-
tified a legislative intention to deter employers from tak-
ing action that would discourage employees from pursuing
the full amount of their wages that are due. For example,
ORS 653.055(2) prevents employers from using “[a]ny agree-
ment between an employee and an employer to work at less
than” minimum wage to defeat a wage claim. And ORS
652.160 directs that, if there is a dispute about the amount
of wages due at termination, the employer still “must pay,
without condition,” the amount “conceded by the employer
to be due” and allow the employee to pursue the disputed
balance.
Oregon’s wage statutes also impose obligations on
employers to know what wages are due and when those
wages are payable. For example, every employer who must
pay a minimum wage is required to keep a record of the
“actual hours worked each week and each pay period by each
employee.” ORS 653.045(1). In addition, “every employer
shall establish and maintain a regular payday, at which
date the employer shall pay all employees the wages due and
owing to them” and “shall provide the employee” an itemized
statement on each payday that details how the wages pay-
ment was calculated. ORS 652.120; ORS 652.610(1). Finally,
employers are directed that, upon the employee’s termina-
tion, “all wages earned and unpaid” are “due and payable
not later than the end of the first business day after the
discharge or termination.” ORS 652.140(1).
Thus, liability for fees under ORS 652.200(2) arises
in a context that assumes that the employer will have had
multiple prefiling opportunities to avoid incurring the obli-
gation to pay the employee’s attorney fees—first by paying all
wages when due, next by paying the outstanding wage obli-
gation at least within the 48-hour grace period, and finally
even by paying the outstanding wage obligation at any time
Cite as 367 Or 437 (2020) 447
before the employee has located an attorney and filed an
action. After an action is filed, however, unless the employ-
ee’s attorney has unreasonably failed to provide notice or
unless the employee has breached a contract, a judgment
for employee must include “a reasonable sum * * * for pros-
ecuting the action” at trial and on appeal. ORS 652.200(2).
That structure, under which the employer’s obligation to
pay attorney fees is determined entirely by actions that
the parties have taken—or not taken—before the action is
filed is similar to the structure of ORS 20.080 that Powers
described as “nullif[ied], at least in part,” by application of
ORCP 54 E(3), under which a defendant is able “to cut off the
plaintiff’s right to attorney fees by making an offer of judg-
ment after the filing of an action but before trial.” 345 Or at
440.
Finally, relevant context also includes ORS 20.075,
which specifies numerous factors that a court “shall consider”
in determining the amount of fees to award when a statute
or contract provides for mandatory fees, particularly includ-
ing the “objective reasonableness” and “diligence of the par-
ties in pursuing settlement of the dispute” and “the results
obtained.” ORS 20.075(1)(f), (2)(d); see McCarthy v. Oregon
Freeze Dry, Inc., 327 Or 84, 93, 957 P2d 1200, clarified and
adh’d to on recons, 327 Or 185, 957 P2d 1200 (1998) (consid-
ering ORS 20.075 as context for understanding meaning of
fee statute). Under ORS 20.075, if an employee has persisted
in an action to collect wages, despite the employer’s offer to
pay a reasonable estimate of wages due, that is always a fac-
tor that the court must consider when determining a “rea-
sonable sum” of attorney fees under ORS 652.200(2). And
if the employer honors its obligation under ORS 652.160 to
pay the amount that it concedes to be due, yet the employee
continues the litigation without obtaining a better result,
then that lack of success is yet another factor that the court
must consider when determining the “reasonable sum” of
attorney fees.
2. ORCP 54 E(3).
ORCP 54 E(3) creates a different process. Although
the provision is part of a procedural rule, our task—as with
statutes—is to identify the intent behind the provision by
448 Mathis v. St. Helens Auto Center, Inc.
looking primarily to its text and context.7 See Waddill v.
Anchor Hocking, Inc., 330 Or 376, 381, 8 P3d 200 (2000),
adh’d to on recons, 331 Or 595, 18 P3d 1096 (2001) (explain-
ing that, in general, we construe provisions of the ORCP
through the same methodology that we employ to construe
statutes, in that we look first to the text and context of the
rule). Through several subsections, ORCP 54 E specifies: the
process by which a defendant may make an offer to allow
judgment in a specified amount, ORCP 54 E(1); the process
by which the offer may be accepted, ORCP 54 E(2); and—at
issue in this case—the consequences that may follow for a
plaintiff who rejects the offer:
“If the offer is not accepted and filed within the time pre-
scribed, it shall be deemed withdrawn, and shall not be given
in evidence at trial and may be filed with the court only after
the case has been adjudicated on the merits and only if the
party asserting the claim fails to obtain a judgment more
favorable than the offer to allow judgment. In such a case,
the party asserting the claim shall not recover costs, pre-
vailing party fees, disbursements, or attorney fees incurred
after the date of the offer, but the party against whom the
claim was asserted shall recover from the party asserting
the claim costs and disbursements, not including prevailing
party fees, from the time of the service of the offer.”
ORCP 54 E(3).
The rule offers both parties an incentive to compro-
mise disputed claims. To the party defending a claim that
carries a risk of fee-shifting, the rule provides an opportu-
nity to limit the extent of that risk through an offer to pay
7
In our construction of provisions of the ORCPs, our inquiry can differ
slightly from the same inquiry with respect to a statute, because the rules are
drafted and promulgated by the Council on Court Procedures and go into effect
automatically, after an opportunity for amendment, repeal or supplementation by
the legislature. See ORS 1.735(1) (authorizing Council to promulgate rules that
will go into effect automatically following the close of the next legislative session,
although “[t]he Legislative Assembly may, by statute, amend, repeal or supple-
ment any of the rules”). The potential difference for purposes of discerning intent
is that, “unless the legislature amended the rule at issue in a particular case in
a manner that affects the issues in that case, the Council’s intent governs the
interpretation of the rule.” Waddill v. Anchor Hocking, Inc., 330 Or 376, 382 n 2,
8 P3d 200 (2000), adh’d to on recons, 331 Or 595, 18 P3d 1096 (2001). In this case,
neither party addresses whether the pertinent intent behind the dispositive por-
tion of ORCP 54 E(3) should be that of the Council or that of the legislature. And
resolving that question is, ultimately, unnecessary to our resolution of this case.
Cite as 367 Or 437 (2020) 449
what the defending party expects to owe following trial.
Whether the plaintiff accepts or rejects the offer, it will have
had the effect of cutting off the defendant’s mounting liabil-
ity for attorney fees, unless the plaintiff manages to recover
more than the offer at trial. Although an ordinary offer or
compromise, or tender of payment, might achieve the same
result through the ORS 20.075 “reasonable fee” consider-
ations, ORCP 54 E(3) provides a certainty that ORS 20.075
does not: it guarantees that fees will be limited if the plain-
tiff continues the litigation without recovering more than
the offer, regardless of how objectively reasonable the plain-
tiff’s decision to reject the offer may have been.
To the plaintiff pursuing a fee-shifting claim, ORCP
54 E(3) offers the threat that, if the judge or jury ultimately
disagrees with the party’s assessment of what is due, then
liability for any fees or costs incurred after the date of the
offer will be borne by the plaintiff and, in addition, that the
plaintiff will also bear liability for costs that the defendant
incurs after the date of the offer. Although a plaintiff will
always have some financial incentive to accept the certainty
of a settlement offer and some financial incentive to take the
risk of pursuing a greater amount at trial, ORCP 54 E(3)
shifts the balance toward settlement by increasing the finan-
cial risk attendant to choosing to pursue the claim through
trial. Indeed, that is how this court previously described the
intent behind the former offer-of-judgment statute, on which
the Council on Court Procedures based ORCP 54 E(3):8 As
8
The history of the adoption of ORCP 54 indicates that the council intended
section E, when initially adopted, to be “based on” a longstanding offer-of-judgment
statute that has since been repealed, although the council’s rule somewhat
altered the consequence to a plaintiff who fails to accept an offer. Council on Court
Procedures, Staff Comment to Rule 54, reprinted in Frederick R. Merrill, Oregon
Rules of Civil Procedure: A Handbook 119 (1981) (citing former ORS 17.055 (1977),
repealed by Or Laws 1979, ch 284, § 199). The former statute, and ORCP 54 as
first promulgated, specified that the party asserting the claim would “not recover
costs,” but statutory attorney fees were sometimes treated as distinct from costs.
Former ORS 17.055; ORCP 54 E (1979); Pritchett v. Fry, 286 Or 189, 192, 593
P2d 1133 (1979) (because the statute at issue provided that attorney fees were
to be awarded “together with costs,” it “impl[ied] that attorney fees and costs are
distinct items”); see also Carlson v. Blumenstein, 293 Or 494, 503, 651 P2d 710(1982) (“An offer of compromise under ORS 17.055 operates to cut off a plaintiff’s
rights to costs and disbursements. It does not concern attorney fees.”). An amend-
ment to ORCP 54 E the following year added the current requirement that “the
party asserting the claim shall not recover costs, disbursements, and attorney
fees incurred after the date of the offer.” ORCP 54 E (1980) (emphasis added).
450 Mathis v. St. Helens Auto Center, Inc.
this court explained in Carlson v. Blumenstein, 293 Or 494,
503-04, 651 P2d 710 (1982), the purpose of the statutory
predecessor to ORCP 54 E(3) “was undoubtedly to encour-
age the settlement of cases and reduce court congestion by
penalizing a plaintiff who fails to accept what, in retrospect,
is seen to have been a reasonable offer.”9
B. If possible, give full effect to all.
Nothing in the discussion so far points out a clear
inconsistency between ORCP 54 E(3) and ORS 652.200(2).
Indeed, defendant argues that the two provisions both serve
the purpose of encouraging employers to resolve wage claims
more promptly. And in one sense they may: To the extent that
ORCP 54 E(3) encourages employers to reasonably estimate
and offer to pay wage claims prior to trial, the result seem-
ingly complements the prompt payment of wages that ORS
652.200(2) is intended to accomplish. However, this court in
Powers rejected a similar theory of compatibility between
ORCP 54 E(3) and ORS 20.080. The opinion explained, and
then rejected, earlier reasoning by the Court of Appeals that
both ORCP 54 E(3) and ORS 20.080 could be given full effect
because the statute provided an incentive for defendants to
settle a claim prior to the filing of a complaint and the rule
“provided an incentive to do the same after the filing of the
complaint.” 345 Or at 436, 443 (describing and disagreeing
with the reasoning of Bell v. Morales, 207 Or App 326, 142
P3d 76 (2006)). Moreover, the ORCP 54 E(3) procedure is
particularly incompatible with the goal of prompt payment
of wages that the legislature intended to advance under
ORS 652.200(2), because an ORCP 54 E(3) offer does not
mean that the employer has paid the wage claim or even con-
ceded that some portion of the wage claim is valid. Rather,
it means that the employer has offered to pay some portion
of the claim on the condition that the employee abandon the
effort to collect any additional amount that the employee
may contend is due. Viewed in that context, ORCP 54 E(3) is
less a mechanism that facilitates payment of all wages due
than it is a mechanism that encourages the employer to offer
9
Carlson explained that some version of the offer-of-judgment statute has
been a part of Oregon law since 1862. 293 Or at 503-04 (citing Deady’s General
Laws of Oregon § 511).
Cite as 367 Or 437 (2020) 451
an estimate of what is due and encourages the employee to
accept the employer’s estimate.
As a result, the rule facilitates payment of all wages
that are due only to the extent that the defendant’s offer is
an accurate estimate of the wages that are due, which is
the first source of conflict between ORCP 54 E(3) and ORS
652.200(2). By creating an incentive for claimants to abandon
any claim to more than the defendant’s estimate, an ORCP
54 E(3) offer increases the likelihood that employees will be
dissuaded from promptly and unconditionally collecting all
wages that are due—contrary to the legislative intention
underlying the mandatory award of fees to employees. See
Hekker, 265 Or at 559; ORS 652.160 (describing employer’s
obligation to “pay, without condition, * * * all wages conceded
by the employer to be due, leaving the employee all remedies
the employee might otherwise have or be entitled to as to
any balance the employee might claim”).
Our decision in Powers points to another way in
which ORCP 54 E(3) is in conflict with ORS 652.200(2).
Powers explained that ORCP 54 E(3) offers defendants the
opportunity to limit their potential attorney fee obligation by
making an offer of judgment after an action has been filed.
345 Or at 440. That opportunity, the court concluded, “under-
mine[d] the core purpose” of ORS 20.080, which uses the risk
of attorney fees if an action must be filed to create an incen-
tive for defendants to evaluate and resolve claims “before the
plaintiff files an action.” Id. at 440-41 (emphasis in original).
The court reasoned that if, in the context of a claim governed
by ORS 20.080, a defendant is able to reduce its attorney
fee obligation “significantly by making an offer of judgment”
after the plaintiff files an action, then “the defendant’s incen-
tive to settle a claim before the filing of an action is reduced,
if not eliminated.”10 Id. at 443; see Colby v. Larson, 208 Or
121, 126, 297 P2d 1073, reh’g den, 208 Or 128, 299 P2d 107610
The statement from Powers contains an element of hyperbole. As a practi-
cal matter, it is unlikely that ORCP 54 E would eliminate—rather than simply
reduce—the incentive to pay claims without waiting for litigation, because ORCP
54 E limits but does not eliminate attorney fee liability. There is more preci-
sion in Powers’s other descriptions of the conflict—that the ORCP 54 E procedure
“allows a defendant to nullify, at least in part, the obligation to pay attorney fees
that ORS 20.080(1) creates.” 345 Or at 440.
452 Mathis v. St. Helens Auto Center, Inc.
(1956) (observing that statutory predecessor to ORCP 54 E
made it easier for a defendant to ignore a claimed liability
“secure in the knowledge that if action should be brought, he
could escape payment of an attorney’s fee”). Defendant does
not ask us to disavow Powers’s conclusion about the effect of
ORCP 54 E on a defendant’s incentive to pay without wait-
ing for litigation. And that conclusion applies equally when
the claim is one for unpaid wages, for which ORS 652.200(2)
uses the risk of attorney fees if an action is filed to create
an incentive for defendants to evaluate and resolve claims
before the employee needs to file an action.
We recognize that our description of those two sources
of conflict assumes a paradigm in which some employers fail
to voluntarily pay the wages that they have agreed to pay
and some employers use their superior economic position to
dissuade employees from pursuing good faith claims. The
dissent assumes a different paradigm—that the availabil-
ity of ORCP 54 E(3) will not diminish a defendant’s incen-
tive to pay wages promptly and that employees who believe
that an offer undervalues the claim will be in an economic
position simply to “not accept it.” 367 Or at 459 (Garrett, J.,
dissenting). Which paradigm most accurately describes the
dynamic between twenty-first-century employers and their
employees is not a question that we are asked—or equipped
on this record—to resolve. But our past decisions make clear
that the legislature assumed—and sought to address—a
paradigm in which some employers would fail to promptly
pay their employees the compensation that is due, unless
forced to do so by a lawsuit, and some would leverage their
position of economic superiority to “dissuade an employe[e]
from promptly collecting his agreed compensation.” Hekker,
265 Or at 559; see also Lamy, 281 Or at 313; Nilsen, 248 Or at
138. Although we reject any presumption that an employer
acts in bad faith by opposing a wage claim, we cannot ignore
what we have previously identified as the legislature’s inten-
tion to discourage, through its mandate of attorney fees, the
resistance of some employers to promptly paying the agreed
compensation.11 See Hekker, 265 Or at 559.
11
The Court of Appeals majority dismissed the significance of that intention
out of concern that “many attorney fee statutes apply to types of conflicts that fre-
quently involve disparities in economic power.” Mathis, 298 Or App at 667. There
Cite as 367 Or 437 (2020) 453
And we cannot ignore our conclusion in Powers that
ORCP 54 E reduces “the defendant’s incentive to settle a
claim before the filing of an action” because it creates the
opportunity for a defendant to reduce its attorney fee obliga-
tion “significantly by making an offer of judgment” after the
action has been filed. 345 Or at 443. That result placed the
rule in an irreconcilable conflict with ORS 20.080, the goal of
which the court identified as creating an incentive for defen-
dants “to settle prior to the filing of the action.” Id. (emphasis
in original). The dissent is mistaken that Powers’s conclu-
sion about the effect of ORCP 54 E(3) can be disregarded
because of the opinion’s emphasis that “[a] crucial feature of”
ORS 20.080 was the pressure that it placed on defendants
to pay the low-value claim prior to the filing of an action.
367 Or at 461 (Garrett, J., dissenting) (quoting Powers, 345
Or at 439). As explained above, that is essentially the same
pressure that the legislature intended to place on employers
through the requirement of ORS 652.200(2) that employers
who fail to pay wages—amounts that generally should be
readily calculable—must also pay a reasonable attorney fee
if the employee is forced to bring an action, as long as cer-
tain procedural requirements have been met prior to the fil-
ing of the action. Those prefiling requirements, which gen-
erally ensure that the employer has advance written notice
of the wage claim, allow the employer to resolve the mat-
ter of unpaid wages before an action is filed and thereby
to avoid liability for the employee’s attorney fees.12 Not only
does ORS 652.200(2) create an incentive for employers to
pay readily knowable financial obligations without waiting
for the employee to file an action, a purpose that the statute
shares with ORS 20.080, but, in addition, ORS 652.200(2)
assumes that the relative financial positions of the parties
will make such an incentive necessary. In the context of an
is a difference, however, between a statute that merely applies in a context that
may involve disparities of economic power and a statute that reflects a legislative
intention to “discourage an employer from using a position of economic superior-
ity as a lever to dissuade an employe[e] from promptly collecting” compensation
that is due. See Hekker, 265 Or at 559.
12
We recognize that some wage claims may come as a surprise to even the
most diligent employer, but the legislature appears to have offered those employ-
ers an opportunity to avoid fees with the requirement that the plaintiff’s attorney
must not have “unreasonably failed to give written notice” of the claim prior to
filing the action. ORS 652.200(2).
454 Mathis v. St. Helens Auto Center, Inc.
action governed by such a statute, we are not persuaded
that we can distinguish Powers’s conclusion that the effect
of ORCP 54 E(3) is to “allow[ ] a defendant to nullify, at least
in part, the obligation to pay attorney fees that [the statute]
creates.” 345 Or at 440. Accordingly, we conclude that in the
context of a claim governed by ORS 652.200(2), allowing the
employer to limit its fee obligation under ORCP 54 E(3) con-
flicts with the legislative intent underlying the statutory fee
obligation.
C. The more particular should control.
Ordinarily, our conclusion that the two provisions
cannot both be given effect would take us to an analysis
of which provision is the more general and which reflects
the more particular intent that should control.13 See ORS
174.020(2) (“When a general and particular provision are
inconsistent, the latter is paramount to the former so that a
particular intent controls a general intent that is inconsis-
tent with the particular intent.”). But two factors make that
analysis unnecessary in this case. First, we are guided by
our decision in Powers that, compared to ORS 20.080—which
provides for fee-shifting on a specific category of claim—the
procedural mechanism of ORCP 54 E(3) is more general,
because it “applies to all civil proceedings.” 345 Or at 443.
Second, our analysis is shaped by the arguments raised by
the parties. Here, defendant does not argue that we mis-
identified ORCP 54 as the more general provision in Powers
or that the answer should be different in the event of a con-
flict with ORS 652.200(2). Indeed, both parties assume that
ORS 652.200(2) is the more particular provision that should
be paramount if it is not possible to give full effect to both
provisions. Under the circumstances, we employ the rea-
soning of Powers and conclude that ORS 652.200(2)—which
13
Justice Landau proposed in his concurring opinion in State v. Vanornum,
354 Or 614, 634, 317 P3d 889 (2013) (Landau, J., concurring), that the process by
which the ORCPs are created means that “they are not statutes, unless they were
affirmatively approved or amended by the legislature” and that “[t]he distinction
matters,” because “[t]o the extent that any rule conflicts with a statute enacted
by the legislature, the rule is invalid.” Neither party addresses the extent to
which ORCP 54 E(3) is a product of legislative action or questions our implicit
assumption in Powers that the rule has a force equivalent to statute. We decline
to undertake that analysis sua sponte in a case that does not ultimately turn on
that possible distinction.
Cite as 367 Or 437 (2020) 455
applies to a specific category of claim—is more particular
than, and is paramount to, ORCP 54 E(3), which “applies
to all civil proceedings.” 345 Or at 443. Any need to limit
the attorney fees of an employee who unreasonably rejects a
good faith offer or tender—as the dissent implies employee
did here—can be addressed on a case-by-case basis under
ORS 20.075(2), but the “reasonable” attorney fee required
by ORS 652.200(2) cannot be categorically limited through
ORCP 54 E(3).
The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.
GARRETT, J., dissenting.
The majority concludes that the offer-of-judgment
rule in ORCP 54 E(3),1 which would otherwise apply in this
case, irreconcilably conflicts with ORS 652.200(2) and there-
fore must give way. I respectfully dissent.
The facts of this case illustrate the good sense behind
the “offer of judgment” rule. Plaintiff made a demand for
unpaid wages, defendant rejected that demand, and plain-
tiff filed a complaint. Defendant subsequently made an offer
of judgment for $2,000. If plaintiff had accepted that offer,
he would have been entitled to $2,000—plus $6,310 for his
attorney fees incurred through that date.2 Plaintiff rejected
the offer, however, and the matter proceeded to a final deter-
mination on the merits. Plaintiff ultimately recovered less
than $1,400.
Although plaintiff had been made significantly
worse off by rejecting the $2,000 offer and proceeding to
a final determination, he sought attorney fees of $62,508
incurred through the end of the case. Under ORS 652.200(2),
plaintiff was entitled to “a reasonable sum for attorney fees.”
1
As does the majority, I refer to the current version of ORCP 54 E. See 367
Or at 439 n 1 (so explaining).
2
The offer stated that it was “exclusive of costs, disbursements, and attorney
fees.” Pursuant to ORCP 54 E(2), plaintiff would have been entitled to accept the
offer, then request the fees incurred to date. Id. (“If the offer does not state that it
includes costs and disbursements or attorney fees, the party asserting the claim
shall submit any claim for costs and disbursements or attorney fees to the court
as provided in Rule 68.”).
456 Mathis v. St. Helens Auto Center, Inc.
Under ORCP 54 E(3), however, plaintiff was not entitled to
attorney fees incurred after the offer of judgment, because
he recovered less than the amount of the rejected offer. The
trial court applied both those provisions and awarded plain-
tiff attorney fees of $6,310.
The application of ORCP 54 E(3) in this situation
reflects the systemic waste involved in spending an addi-
tional $56,198 in attorney time to obtain a worse outcome
for the client than was available through early settlement.
Both parties would have benefited, and judicial resources
been spared, if the offer of judgment had been accepted.
I understand the majority to agree that ORCP 54
E(3) exists to discourage such waste, and that that is a good
thing. But the majority nonetheless concludes that applying
ORCP 54 E(3) here would defeat the legislative objective in
ORS 652.200(2). I disagree.
Both ORCP 54 E(3) and ORS 652.200(2) have the
force of law in this state. To say that one of them shall not
apply when it otherwise would, we must first conclude that
it is not possible to give effect to both:
“[W]here there are several provisions or particulars such
construction is, if possible, to be adopted as will give effect
to all.”
ORS 174.010. Thus, the law contemplates that statutes and
rules may be susceptible to multiple interpretations. As long
as it is “possible” to construe two provisions in reasonable
ways that allow them to operate harmoniously, that is what
this court is required to do. As we explained earlier this
year, “[w]e are to avoid a construction that creates a conflict
or renders one statute ineffective.” Elkhorn Baptist Church
v. Brown, 366 Or 506, 523, 466 P3d 30 (2020). “Courts
will go to great lengths to avoid concluding that statutes
irreconcilably conflict.” Jack L. Landau, Oregon Statutory
Construction, 97 Or L Rev 583, 692 (2019).
No “great lengths” are required to see how ORS
652.200(2) and ORCP 54 E(3) can function together. The
provisions address different questions. ORS 652.200(2) enti-
tles a prevailing wage claimant to an award of attorney fees,
but it says nothing about the amount of fees (beyond stating
Cite as 367 Or 437 (2020) 457
that it must be “reasonable”). ORCP 54 E(3) says nothing
about whether fees should be awarded in a given case;
rather, where fees are available, that rule limits the amount
of recoverable fees if a prevailing party obtains a result that
is not better than an offer of judgment. When a trial court
applies both provisions, as was done here, the result reflects
a construction of the word “reasonable” in ORS 652.200(2)
that mirrors the implicit policy statement in ORCP 54 E(3):
It is not “reasonable” to recover attorney fees for time spent
failing to improve on an offer of judgment, because that time
was essentially wasted.
The only impediment to this understanding is if it
is not “possible” to construe ORS 652.200(2) that way—that
is, if the statute creates an absolute entitlement to a certain
amount of attorney fees that ORCP 54 E(3) would remove.
But that notion is belied by the word “reasonable” in the
statute, which is not self-defining and invites consideration
of context.
Rather than treat ORCP 54 E(3) as hopelessly in
conflict with ORS 652.200(2), we should treat the former
as context for the latter. As the majority notes, we can and
should look outside the four corners of ORS 652.200(2) to
understand what the statute means when it provides for
“reasonable” fees. 367 Or at 446-47. The majority correctly
explains that the amount of fees awardable under ORS
652.200(2) is subject to restrictions imposed by other laws—
at the very least, the factors to determine a reasonable fee
prescribed by ORS 20.075. 367 Or at 447. We have held that
ORS 20.075 is context for statutes authorizing attorney fee
awards, even when the statute authorizing fees had been
enacted before ORS 20.075. See McCarthy v. Oregon Freeze
Dry, Inc., 327 Or 84, 91-94, 957 P2d 1200, clarified and adh’d
to on recons, 327 Or 185, 957 P2d 1200 (1998) (so holding for
version of ORS 20.075 in effect at the time).3
3
In McCarthy, the court was considering the attorney fee provision of former
ORS 659.121 (1998), repealed by Or Laws 2001, ch 621, § 90. 327 Or at 91. The
court expressly noted that, “before the enactment of ORS 20.075, the Court of
Appeals * * * had construed [former] ORS 659.121 [(1998)] to require the use of
a different standard in awarding attorney fees to prevailing plaintiffs and to
prevailing defendants.” Id. at 93. Nevertheless, the court held that ORS 20.075
was context, id., and that former ORS 659.121 (1998) and ORS 20.075 should be
“interpreted together,” id. at 94.
458 Mathis v. St. Helens Auto Center, Inc.
Thus, when ORS 652.200(2) directs the award of
reasonable attorney fees, the amount of those fees will be
determined using the factors in ORS 20.075. That is true
even though ORS 20.075 was not adopted until 1995, when
ORS 652.200(2) had been in existence for decades. Compare
General Laws of Oregon 1919, ch 54, § 1 (amending statute to
provide for mandatory attorney fee award in predecessor to
ORS 652.200(2), former Lord’s Oregon Laws, title XXXVII,
ch IX, § 5068), with Or Laws 1995, ch 618, § 6 (enacting orig-
inal version of ORS 20.075).
But why not consider ORCP 54 E(3), too, as relevant
context? Like ORS 20.075, ORCP 54 E(3) also addresses the
amount of attorney fees and requires consideration of settle-
ment discussions. And the “offer of judgment” rule now found
in ORCP 54 E(3) has been law in Oregon (in various forms)
since 1862.4 Unlike ORS 20.075, what is now ORCP 54 E(3)
predates what is now ORS 652.200(2) by roughly 50 years.5
If ORS 20.075 has a claim to be relevant context for under-
standing the word “reasonable” in ORS 652.200(2), then
ORCP 54 E(3) would seem to have at least an equal claim.6
In short, as a textual and contextual matter, ORS
652.200(2) and ORCP 54 E(3) are readily susceptible to con-
structions that allow them to be applied together.
I understand the majority’s contrary conclusion to
rest largely on a concern that applying ORCP 54 E(3) will
undermine the legislative purpose behind ORS 652.200(2),
to encourage the prompt and full payment of wage claims.
The majority draws heavily on our decision in Powers v.
Quigley, 345 Or 432, 198 P3d 919 (2008). For several rea-
sons, I disagree.
First, the existence of ORCP 54 E(3) does not inter-
fere with the incentive structure that the legislature set up
4
See Carlson v. Blumenstein, 293 Or 494, 503, 651 P2d 710 (1982) (so noting
regarding the predecessor to ORCP 54 E(3), former ORS 17.055 (1975), repealed
by Or Laws 1979, ch 284, § 199).
5
See 367 Or at 444 (explaining that what is now codified as ORS 652.200(2)
originated in 1907 and has been essentially unchanged since 1919).
6
Given that what is now ORCP 54 E(3) predates what is now ORS 652.200(2),
it is worth noting that nothing in ORS 652.200(2) indicates that the legislature
intended that the attorney fees it authorized would not be subject to ORCP 54
E(3)’s offer of judgment rule.
Cite as 367 Or 437 (2020) 459
in ORS 652.200(2). An employer faced with a meritorious
wage claim has an incentive to pay it promptly, because
the attorney-fee provision in ORS 652.200(2) ensures that
the employer will find it far more expensive to litigate
and lose. ORCP 54 E(3) would frustrate ORS 652.200(2)
if an employer could calculate that, by refusing payment,
it could try to negotiate a better outcome through an offer
of judgment. But that is not likely to happen. The moment
an employer refuses a valid claim and a claimant proceeds
to litigate, fees begin accruing and the claim grows more
expensive. The employer has made a mistake; attorney fees
will often dwarf the amount of the wage claim, as was true
here. ORCP 54 E(3) allows the employer to stop the bleed-
ing before trial by making an offer of judgment, but it still
will have been a mistake: the employer would have been
better off paying when the meritorious wage claim was
made.
Put another way, ORCP 54 E(3) allows an employer
to reduce the downstream costs of refusing a valid claim,
but it will not make the employer better off than the
employer would have been by paying early. ORS 652.200(2)
still operates to ensure that an employer will find it more
cost-effective to pay a valid claim fully and promptly. That
core incentive remains intact whether or not ORCP 54 E(3)
exists.
Nor is ORCP 54 E(3) likely to allow the employer to
leverage a “low-ball” offer and pressure a claimant into set-
tling for less than the fair value of the claim. To get any ben-
efit from the rule, a defendant must offer an amount large
enough to do at least one of two things:
• Persuade the plaintiff that it is a reasonable value
for the claim.
• Be at least equal to the amount that the defendant
expects that plaintiff would recover at trial.
Consider: If the plaintiff is not persuaded that the offer rea-
sonably values the claim, then the plaintiff will not accept
it. But if a rejected offer is not at least equal to what the
defendant expects the plaintiff to recover at trial, then the
460 Mathis v. St. Helens Auto Center, Inc.
defendant cannot expect that ORCP 54 E(3) will limit the
amount of attorney fees. In short, to get the benefit of ORCP
54 E(3), the offer of judgment must exceed one or both of
those amounts.
That remains true even if the defendant has an
informational advantage over the plaintiff. Suppose that
a defendant makes an offer of judgment prior to discovery.
If the plaintiff suspects that the offer does not reasonably
value the claim, the plaintiff will reject the offer, and the
matter will proceed to trial. But, in that event, the defen-
dant knows that it will gain no benefit from having made
the offer of judgment unless it was in excess of what the
defendant concludes that the plaintiff is reasonably likely to
recover at trial. To take advantage of ORCP 54 E(3), then,
the defendant has an incentive to use an informational
advantage to construct a fair offer.
In short, ORCP 54 E(3) does not change the fact
that an employer will find it more cost-effective, as a result
of ORS 652.200(2), to pay a valid claim promptly than to liti-
gate. All that ORCP 54 E(3) can accomplish for the employer
is to make the litigation path potentially less costly than it
would otherwise be (though still more costly than prompt
payment).
The majority, like the dissenting opinion in the
Court of Appeals, concludes that that cost-lowering feature
of ORCP 54 E(3) is what frustrates ORS 652.200(2), and in
doing so draws heavily on our decision in Powers. That case
is distinguishable.
Powers considered whether there was a conflict
between the versions of ORCP 54 E(3) and ORS 20.080(1) in
effect at that time. 345 Or at 432. At that time, ORS 20.080(1)
provided for an award of attorney fees in tort cases involv-
ing $5,500 or less. Id. The statute then expressly addressed
what should happen with attorney fees if the defendant had
offered the plaintiff more than the plaintiff recovered at
trial:
“ ‘[N]o attorney fees shall be allowed to the plaintiff if the
court finds that the defendant tendered to the plaintiff,
Cite as 367 Or 437 (2020) 461
prior to the commencement of the action * * *, an amount
not less than the damages awarded to the plaintiff.’ ”
Powers, 345 Or at 437 (quoting relevant version of ORS
20.080(1)).
The statute thus expressly required the defendant
to have tendered an amount to the plaintiff “prior to the
commencement of the action.” See id. Powers repeatedly
emphasized that the source of the conflict arose from that
aspect of ORS 20.080(1):
“A crucial feature of that ‘pressure [on a defendant to set-
tle],’ * * * is that it applies prior to filing the action. By the
explicit terms of ORS 20.080(1), a tortfeasor can avoid an
award of attorney fees under ORS 20.080(1) only by making
an offer of settlement before the plaintiff files a complaint.
A tortfeasor’s offers made after that date do not affect
the statutory right to attorney fees that ORS 20.080(1)
creates.”
345 Or at 439 (emphasis in original). ORCP 54 E(3), by con-
trast, limited the “recovery of attorney fees * * * if * * * the
defendant, at any time up to 10 days prior to trial,” made an
offer of judgment that the plaintiff rejected but that exceeded
the amount recovered at trial. 345 Or at 440 (emphasis in
original). From that, the court concluded:
“A conflict between these provisions is apparent from
their text. ORS 20.080(1) provides that, in tort claims of
$5,500 or less, a plaintiff is entitled to receive attorney fees
if the plaintiff satisfies certain procedural requirements
prior to filing the action. ORCP 54 E, however, allows a
defendant to cut off the plaintiff’s right to attorney fees by
making an offer of judgment after the filing of an action but
before trial.”
Id. (emphases added). That, Powers explained, meant that
there was a conflict “on the basis of their statutory text
alone.” 345 Or at 441.
There is no similar textual conflict in this case. The
language at issue in Powers could be seen to reflect a policy
(wisely or not) that an employer must act before an action is
filed or lose altogether the chance to cut its losses through
462 Mathis v. St. Helens Auto Center, Inc.
ORCP 54 E(3). ORS 652.200(2) does not impose a similar
timing requirement.7
Although it appears to agree that Powers is not con-
trolling, the majority nonetheless focuses on Powers’s addi-
tional conclusion that ORCP 54 E(3) “can negate, at least
in part” the direction to award attorney fees under ORS
20.080. See 367 Or at 451-52 (citing Powers’s statement that,
with ORCP 54 E(3), the defendant’s incentive to pay without
waiting for the employee to file a lawsuit “is reduced, if not
eliminated”). However, it is not clear that Powers intended
that point to be independent of its earlier explanation of the
textual conflict regarding the timing and effect of settle-
ment offers. See Powers, 345 Or at 440-41 (“It follows from
the foregoing that we find a conflict between ORS 20.080(1)
and ORCP 54 E on the basis of their statutory text alone.”).
Powers was offering additional support for its conclusion
that the settlement timing provisions conflicted. It was not
necessarily setting out an alternative, independent basis for
concluding that ORCP 54 E(3) conflicted with ORS 20.080(1).
See 345 Or at 440 (“[s]een in [the] light” of the textual con-
flict, ORCP 54 E(3) conflicted with the purposes underlying
ORS 20.080(1)).
Moreover, that aspect of Powers’s reasoning is ques-
tionable and should not be extended. In Powers, this court
reasoned that, “if a defendant can reduce an award of attor-
ney fees under ORS 20.080 significantly by making an offer
of judgment under ORCP 54 E, the defendant’s incentive to
settle a claim before the filing of an action is reduced, if not
eliminated.” 345 Or at 443. The majority is right to recog-
nize the “hyperbole” in that statement, 367 Or at 451 n 10;
7
The statute at issue in Powers, ORS 20.080(1), differs from that in this case,
ORS 652.200(2), in another way. Under ORS 20.080(1), a plaintiff could recover
attorney fees only if the plaintiff beat the defendant’s offer. But, under the major-
ity’s interpretation of ORS 652.200(2), a plaintiff can recover attorney fees even
if the plaintiff fails to beat the defendant’s offer. As the Court of Appeals pointed
out, that interpretation discourages efficient settlement:
“A plaintiff with a valid claim would have little incentive to accept an offer.
Instead, he or she would have good reason to continue litigating—either
in the hopes of obtaining a larger award or, at least, driving up the settle-
ment value—because, so long as a single dollar was ultimately awarded, the
employer would be liable for all of plaintiff’s fees and costs.”
Mathis, 298 Or App at 665-66 (footnote omitted).
Cite as 367 Or 437 (2020) 463
for the reasons explained above, it is difficult to see how
ORCP 54 E could ever “eliminate” the incentive to promptly
pay a valid claim that a fee-shifting statute like ORS 20.080
or ORS 652.200(2) creates. Again, ORCP 54 E simply allows
for mitigation of the higher costs that the defendant will face
by litigating a valid claim. ORCP 54 E may therefore lessen
the impact of the fee-shifting statute, but that is a far cry
from irreconcilable conflict. To the extent that this court in
Powers regarded the two as equivalent, that conclusion was
not satisfactorily explained. Given the textual differences
between the statute at issue there and ORS 652.200(2), I
would not extend Powers’s reasoning to this case.
At bottom, the majority is correct to note that Powers
is not controlling and that the fundamental issue is whether
it is “possible” reasonably to construe ORS 652.200(2) to
work harmoniously with ORCP 54 E(3). I believe it is, and
respectfully dissent.
Duncan, J., joins in this dissenting opinion.