Magno, LLC v. Bowden ( 2020 )

668
Argued and submitted October 31, 2019; in A158775, order requiring
payment of additional amount to satisfy judgment reversed and remanded
for determination of amount, if any, owing under 1999 judgment, otherwise
affirmed; in A165753, supplemental judgment awarding plaintiff attorney fees
reversed, otherwise affirmed December 2, 2020
MAGNO, LLC,
Plaintiff-Appellant
Cross-Respondent,
v.
Jeffrey D. BOWDEN,
Defendant-Respondent
Cross-Appellant,
and
BOWDEN ENTERPRISES, INC.,
Defendant.
MAGNO, LLC,
Plaintiff-Respondent,
v.
Jeffrey D. BOWDEN,
Defendant-Appellant,
and
BOWDEN ENTERPRISES, INC.,
Defendant.
Washington County Circuit Court
C990586CV;
A158775 (Control), A165753
479 P3d 592
Plaintiff appeals from an order under ORS 18.325 determining that defen-
dants had satisfied a 1999 judgment for rent and from a supplemental judgment
awarding fees to defendant Bowden. Defendant Bowden cross-appeals, asserting
that the trial court erred in determining in an earlier order that Bowden owed
an additional payment of $19,625 plus interest under the 1999 judgment. In a
separate appeal, Bowden contends that the court erred in awarding attorney fees
to plaintiff for recovering additional funds. Held: Bowden’s obligation to pay rent
under the 1999 judgment ceased with the restitution of the premises on August 1,
2000. After that date, there was no entitlement to rent or obligation to pay it.
Defendants paid sufficient funds to cover the rent through August 1, 2000. The
trial court therefore erred in determining that an additional payment of $19,925
was required of defendants to satisfy the judgment. The Court of Appeals held
that the record also supported the trial court’s award of attorney fees to Bowden.
Cite as 307 Or App 668 (2020) 669
On Bowden’s separate appeal, in light of the determination that no additional
amounts were owed by defendants on the 1999 judgment, the court reversed the
supplemental judgment awarding fees.
In A158775, order requiring payment of additional amount to satisfy judg-
ment reversed and remanded for determination of amount, if any, owing under
1999 judgment; otherwise affirmed; in A165753, supplemental judgment award-
ing plaintiff attorney fees reversed; otherwise affirmed.
Janelle F. Wipper, Judge.
Bruce H. Orr argued the cause for Jeffery D. Bowden.
Also on the briefs was Wyse Kadish LLP.
Terrence Kay argued the cause for Magno, LLC. Also on
the briefs was Matthew Chandler.
Before Armstrong, Presiding Judge, and Tookey, Judge,
and Aoyagi, Judge.
ARMSTRONG, P. J.
In A158775, order requiring payment of additional
amount to satisfy judgment reversed and remanded for
determination of amount, if any, owing under 1999 judg-
ment; otherwise affirmed; in A165753, supplemental judg-
ment awarding plaintiff attorney fees reversed; otherwise
affirmed.
670 Magno, LLC v. Bowden
ARMSTRONG, P. J.
These consolidated appeals are from an order under
ORS 18.325 declaring that an obligation of defendants Jeffrey
D. Bowden (Bowden) and Bowden Enterprises, Inc., under
a 1999 judgment has been satisfied, and from supplemen-
tal judgments awarding both parties their attorney fees. On
plaintiff’s appeal in A158775, we affirm the trial court’s deter-
mination that defendants ultimately satisfied the 1999 judg-
ment and the court’s supplemental judgment awarding fees
to Bowden. However, on Bowden’s cross-appeal in A158775,
we conclude that the court erred in determining in an ear-
lier order that Bowden was required to make an additional
payment of $19,625 plus interest in order to satisfy the 1999
judgment. On Bowden’s appeal in A165753, we reverse the
supplemental judgment awarding attorney fees to plaintiffs.
The facts are undisputed. Plaintiff Magno, LLC,
owns a 30,000 square foot commercial property. In 1997,
plaintiff’s predecessor in interest entered into a five-year
commercial lease for the entire premises with defendants
Bowden Enterprises, Inc., and Bowden, for the period April 1,
1997, through March 31, 2002. Bowden, individually, also
was a guarantor of Bowden Enterprise’s obligation under
the lease.
Defendants had difficulties paying rent. Plaintiff
acquired the property in 1999 and received an assignment
of the lease. On May 14, 1999, when defendants were late on
the May rent payment, plaintiff brought an action against
Bowden only, for the May rent. The complaint alleged claims
for breach of the lease, breach of the guaranty, and com-
mercial FED, and sought a judgment for possession of the
premises and a “continuing judgment” for all rent due and
to become due on the remainder of the lease.
Bowden failed to appear in the action, but defen-
dants paid rent for May and June 1999. On July 8, 1999,
plaintiff obtained a default judgment against Bowden, both
as a lessee and as guarantor, for the rent owing in July 1999
and for the full duration of the lease.1 At that point, the July
1
Plaintiff’s motion for a default judgment did not seek restitution of the
premises, because, at the time, Bowden Enterprises was in Chapter 11 bank-
ruptcy, and any eviction or termination of the lease was stayed.
Cite as 307 Or App 668 (2020) 671
rent payment was one week late. The “recital” portion of the
judgment stated:
“[T]he Court hereby finds that Defendant is in default for
failing to appear and defend, the Plaintiff’s allegations
regarding breach of the lease and guaranty and the evic-
tion are deemed true based on the default, and, according
to the lease the Plaintiff shall have the right to apply for
an award of all its unpaid rent through the balance of this
lease less any actual rent received upon releasing, and any
expenses, damages, attorney fees, costs and disbursements
provided under the lease. Plaintiff shall have the right to
apply to the Court for the award of all such amounts to be
awarded by supplemental or separate judgments and the
Court finds there is no just cause for delay in entering
under ORCP 67B, and hereby.”
(Emphasis added.) The adjudicative section of the judgment
stated:
“Plaintiff Magno, L.L.C. is awarded a Judgment against
Defendant for all the amounts described above to be
awarded as stated, with a continuing monthly judgment
for rent of $12,925.00 per month beginning July 1, 1999,
plus such additional amounts owing to be subsequently
awarded.”
(Emphasis added.) The judgment included a “Money Judg-
ment Amount”:
“$12,925.00 per month as of July 1, 1999 and the first
of each calendar month hereafter through March 1, 2002
with interest on each monthly amount due with 9% sim-
ple interest per annum until paid [note this is a continu-
ing Judgment of monthly amounts and not a one month
obligation].”
The judgment provided, further:
“Note that additional amounts described above in this
Judgment may be subsequently awarded and entered by
supplemental or other Judgment.”
Bowden did not appeal the judgment. After entry of
the judgment, in July 1999, defendants made the July and
August rent payments. Bowden Enterprises had filed for
672 Magno, LLC v. Bowden
Chapter 11 bankruptcy and could not be evicted during the
bankruptcy stay. But when the stay was lifted in July 1999,
plaintiff amended its complaint to add Bowden Enterprises
as a defendant and, on September 27, 1999, the court entered
a stipulated money judgment against Bowden Enterprises
and a judgment for restitution of the leased premises within
33 days.
The parties agreed to nine extensions of the resti-
tution date and, upon each extension, by agreement, defen-
dants paid plaintiff $9,000 for the continued occupancy of
the premises, but plaintiff did not waive its right under the
judgment to collect “any amount of rent, expenses, fees, or
other amounts” due under the lease. Defendants vacated
the premises on July 31, 2000, and, as of August 1, 2000,
plaintiff had leased approximately 20,000 square feet of the
premises to a third party. The trial court found that, by end
of December 2000, plaintiff had occupied the remainder of
the premises.
As noted, Bowden Enterprises had filed for bank-
ruptcy in 1999. Plaintiff filed a claim in the bankruptcy
court and received a payment of $33,000. In May 2003, plain-
tiff executed a partial satisfaction of the 1999 judgment in
the amount of $33,000. Also in May 2003, plaintiff made a
demand on Bowden for payment of amounts it believed were
still owing under the 1999 judgment, including interest and
attorney fees.
In 2013, plaintiff garnished $3,834.39 from Bowden
and issued a partial satisfaction of the 1999 judgment for
that amount. Also in 2013, plaintiff initiated an action to
foreclose on Bowden’s residence, asserting that Bowden’s
liability under the 1999 judgment had grown to $548,000.
The trial court dismissed that action for failure to state a
claim, awarding Bowden attorney fees as the prevailing
party. An appeal and cross-appeal of that matter are cur-
rently pending (A162346), challenging the award of attorney
fees.
While the foreclosure matter was pending, Bowden
filed a motion in 2014 in this proceeding in the circuit court
Cite as 307 Or App 668 (2020) 673
under ORS 18.235(1),2 or ORCP 71 B(1)(e)3 seeking a deter-
mination that the 1999 judgment had been satisfied in full
or a determination of the amount necessary to satisfy the
judgment. Bowden further sought a determination that the
judgment’s provision for future payments of rent was void or
without effect.
The trial court rejected Bowden’s contention that the
judgment’s provision for future payments was without effect,
concluding that the judgment unambiguously provided for
monthly payments from July 1, 1999 to March 1, 2002. But
the trial court determined that Bowden’s remaining obli-
gation under the judgment had been offset by rent paid
2
ORS 18.235 provides, as relevant:
“(1) A judgment debtor, or a person with an interest in real property
against which a judgment lien exists, may move the court for an order
declaring that a money award has been satisfied or for a determination of
the amount necessary to satisfy the money award, when the person making
the motion cannot otherwise obtain a satisfaction document from a judgment
creditor.
“(2) Motions under this section shall be filed in the action in which the
judgment was entered. All proceedings on the motion shall be conducted as
part of the action in which the judgment was entered. An appearance fee may
not be charged for filing a motion under this section.
“* * * * *
“(7) If the court determines that the person making the motion is enti-
tled to relief, the court shall issue an order providing that the money award
has been satisfied in full or, if the money award has not been satisfied in full,
the specific amount that will satisfy the judgment on a specific date or within
a period of time specified in the order.
“(8) If the court finds that the judgment creditor willfully failed to pro-
vide a satisfaction document under ORS 18.225, the court may render a sup-
plemental judgment awarding reasonable attorney fees to the person making
the motion. The supplemental judgment may provide that the person making
the motion may satisfy the judgment by paying such amounts the court deter-
mines to be necessary to satisfy the judgment less that sum of money the
court awards as attorney fees.”
3
ORCP 71 B(1)(e) provides, in part:
“(1) * * * On motion and upon such terms as are just, the court may relieve
a party or such party’s legal representative from a judgment for the following
reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly
discovered evidence which by due diligence could not have been discovered
in time to move for a new trial under Rule 64F.; (c) fraud (whether previously
called intrinsic or extrinsic), misrepresentation, or other misconduct of an
adverse party; (d) the judgment is void; or (e) the judgment has been satisfied,
released, or discharged, or a prior judgment upon which it is based has been
reversed or otherwise vacated, or it is no longer equitable that the judgment
should have prospective application.”
674 Magno, LLC v. Bowden
to plaintiff by the third-party tenant beginning August 1,
2000, and by the like-kind value of plaintiff’s own occu-
pancy of one-third of the premises beginning in December
2000. The trial court found that Bowden had a remaining
obligation to plaintiff of $19,625, plus interest, based on the
amount of $3,925 that the trial court calculated was owed by
defendants as rent for the five-month period from August 1,
2000, through December 2000, during which time plaintiff
received only $9,000 in rent, paid by the third-party tenant.
In December 2015, Bowden paid plaintiff $42,675.36
in full satisfaction of the judgment. Plaintiff filed a partial
satisfaction of the 1999 judgment, acknowledging the pay-
ment, but declined to file a full satisfaction of the judgment.
Bowden then filed a second motion under ORS
18.235(1), seeking a determination that the 1999 judgment
had been fully satisfied. The court agreed, issuing an order
in June 2016 that the 1999 judgment was fully satisfied and
subsequently entering a supplemental judgment awarding
Bowden attorney fees. The court included in its supplemen-
tal judgment a finding that attorney fees were warranted
under ORS 18.235 “because Plaintiff willfully failed to file
satisfaction document(s) when it was obligated to do so.”
In A158775, plaintiff appeals, asserting that the
trial court erred in determining that the 1999 judgment was
satisfied and in awarding Bowden attorney fees. Bowden
cross-appeals, contending that the trial court erred in fail-
ing to determine in its order that the provisions of the 1999
judgment for future payments were without effect and in
ordering an additional payment to satisfy the judgment.
In a supplemental judgment of July 2017, the trial
court awarded plaintiff its attorney fees for having collected
$42,675.36 on the 1999 judgment. In A165753, Bowden
appeals, asserting that the trial court erred in awarding
attorney fees to plaintiff, because plaintiff had not complied
with the procedural prerequisites for an award of attorney
fees and, further, because there is no statutory authoriza-
tion for the award.
We review the trial court’s legal conclusions for legal
error and its factual determinations for any evidence in the
Cite as 307 Or App 668 (2020) 675
record to support them. Espinoza v. Evergreen Helicopters,
Inc., 359 Or 63, 117, 376 P3d 960 (2016). Because it is largely
dispositive, we address first Bowden’s contention on cross-
appeal in A158775 that the trial court erred in determining
that the 1999 judgment imposed on defendants a continu-
ing judgment of $12,925 per month through March 1, 2002.
Bowden contends that, as a matter of law, the judgment could
not be “continuing.” Further, in Bowden’s view, because the
judgment was for payment of “rent,” it could not, as a mat-
ter of law, have a prospective effect beyond defendants’ pos-
session of the premises. Accordingly, Bowden contends, no
amount was owing on the judgment after the restitution of
the property.
Initially, we reject Bowden’s contention that the
judgment could not legally provide for future periodic pay-
ments of rent. As applicable to the 1999 judgment, former
ORCP 70 A(2)(a)(iv) (1993) provided that, “[f]or judgments
that accrue on a periodic basis,” the judgment should include
“any accrued arrearages, required further payments per
period and accrual dates.” 4 Clearly, former ORCP 70 contem-
plated judgments that accrue on a periodic basis. The 1999
judgment complied with the rule’s requirements for setting
out the payments per period and the accrual dates.
Bowden contends that, because the judgment only
set forth the monthly payment of $12,925 and did not set
forth the total amount of the judgment, it was not valid. We
are not persuaded that the judgment was defective because
it did not state the total amount of money owed under the
lease. The total amount owed under the lease as expressed
in the judgment was readily ascertainable. And, contrary
to Bowden’s contention, the judgment did not depend on
prospective or contingent liability. It awarded periodic pay-
ments of rent in a fixed amount through a date certain, the
term of the lease.
To the extent that the recital portion of the judg-
ment could give rise to an ambiguity by suggesting that
plaintiff must apply for future awards, that ambiguity is
4
ORCP 70 was repealed by Oregon Laws 2003, chapter 576, section 580. Its
substance was recodified in ORS 18.042.
676 Magno, LLC v. Bowden
resolved by reference to the judgment’s text, which unam-
biguously set forth the periodic payments of rent due under
the judgment. In that context, the recital’s reference to “all
such amounts” is readily understood to apply to amounts
above and beyond the monthly rent payments—“expenses,
damages, attorney fees, costs and disbursements provided
under the lease”—for which plaintiff could make application
under the terms of the lease.
Bowden contends that our construction of the judg-
ment is inconsistent with plaintiff’s complaint and with the
lease itself, which did not seek or provide for payment of
unaccrued rent and, if the lease were terminated, autho-
rized only a judgment for the “worth” of future lease pay-
ments if the lessor sought damages, and not for “rent.”
Because plaintiff did not seek termination of the lease or
damages in its complaint or default motion, Bowden con-
tends, the 1999 judgment cannot be construed to provide for
payment of future amounts that would have been due under
the lease. Bowden further argues that, after termination of
the lease in September 1999, plaintiff could have but did not
file a claim for damages based on the worth of future rent.
For those reasons, Bowden contends, the judgment cannot
be construed to have required future payments of rent. But
Bowden did not appear in the action and was defaulted. He
did not seek relief from default or appeal the judgment.5 We
conclude that he has lost the opportunity to challenge the
substantive underpinnings of the judgment. The trial court
did not err in concluding that the judgment was not void and
could have prospective effect beyond the single July rent
payment that was due when the judgment was entered.
But we agree with Bowden’s additional contention that
his obligation to pay “rent” under the judgment terminated
5
Under ORS 19.245(2),
“A party to a judgment given by confession or for want of an answer may
not appeal from the judgment except as follows:
“* * * * *
“(b) A defendant may appeal from the judgment if the trial court has
entered a default judgment against the defendant as a sanction or has denied
a motion to set aside a default order or judgment.
“(c) A defendant may appeal from the judgment if it is void.”
Cite as 307 Or App 668 (2020) 677
with the restitution of the premises on August 1, 2000. After
defendants were no longer occupying the premises, there was
no entitlement to rent or obligation to pay it. It appears from
the record that the amounts paid to plaintiff have exceeded
the amount owing in rent as of the date that the lease ter-
minated and the premises were restored to plaintiff. Thus,
it would appear on this record that there was no additional
money owed under the provisions of the 1999 judgment. The
trial court’s determination that an additional payment of
$19,925 was required to satisfy the judgment was in error, to
the extent that it required payment in excess of the amount
owed by Bowden for rent as of July 31, 2000.
On appeal, plaintiff contends that the trial court
erred in determining that Bowden had satisfied the judg-
ment. In light of our determination that no amount of rent
was owing after July 31, 2000, there was no error. Plaintiff
also challenges the trial court’s award of attorney fees. We
have reviewed the trial court record and conclude that the
trial court did not err or abuse its discretion in determining
that Bowden was entitled to attorney fees.
In his separate appeal, Bowden contends that the
trial court erred in awarding attorney fees to plaintiff on its
recovery of funds owed under the judgment. In light of our
conclusion that no payment of rent was owed under the judg-
ment after termination of the lease and restitution of the
property, we conclude that the trial court erred in awarding
plaintiff its attorney fees.
In A158775, order requiring payment of additional
amount to satisfy judgment reversed and remanded for
determination of amount, if any, owing under 1999 judg-
ment; otherwise affirmed; in A165753, supplemental judg-
ment awarding plaintiff attorney fees reversed; otherwise
affirmed.