Albany & Eastern Railroad Co. v. Martell ( 2022 )

816
Submitted on remand from the Oregon Supreme Court December 3, 2020,
affirmed May 25, petition for review denied October 6, 2022 (370 Or 303)
ALBANY & EASTERN RAILROAD COMPANY,
an Oregon corporation,
Plaintiff-Appellant,
v.
Michael MARTELL
and Cindy Martell, a married couple;
John Harcrow and Elaine Harcrow, a married couple;
Jeffrey Kaiser and Beverly Kaiser, a married couple;
Joanne Fagan, an individual;
Ray McMullen and Michelle McMullen, a married couple;
Jeremy Orr and Karen Orr, a married couple;
Richard Hutchins and Jill Hutchins, a married couple;
Laura Mithoug, an individual,
Defendants-Respondents.
Linn County Circuit Court
13CV00291; A161921
511 P3d 1101
This civil appeal is before the Court of Appeals on remand from the Oregon
Supreme Court, Albany & Eastern Railroad Co. v. Martell, 366 Or 715, 729, 469
P3d 748, adh’d to as modified on recons, 367 Or 139, 475 P3d 437 (2020), and
concerns a disputed easement on plaintiff’s property. The sole issue on remand
is whether the trial court correctly ruled that defendants were entitled to attor-
ney fees under ORS 20.080(2) after prevailing on their equitable counterclaim
for a prescriptive easement. Plaintiff argues that defendants are not entitled to
an award of attorney fees, because, as applicable here, ORS 20.080 authorizes
awards of attorney fees exclusively in small-value tort actions at law. Held: The
trial court did not err. A defendant who successfully prosecutes an equitable
counterclaim in an action otherwise subject to ORS 20.080 is entitled to recover
attorney fees under ORS 20.080(2).
Affirmed.
On remand from the Oregon Supreme Court, Albany &
Eastern Railroad Co. v. Martell, 366 Or 715, 469 P3d 748
(2020).
David E. Delsman, Judge.
John Kennedy argued the cause for appellant. Also on
the briefs was The Morley Thomas Law Firm.
Cite as 319 Or App 816 (2022) 817
Dan Armstrong argued the cause for respondents. Also
on the brief was Heilig Misfeldt & Armstrong, LLP
Before Mooney, Presiding Judge, and Pagán, Judge, and
DeHoog, Judge pro tempore.
DeHOOG, J. pro tempore.
Affirmed.
818 Albany & Eastern Railroad Co. v. Martell
DeHOOG, J. pro tempore
This case is before us on remand from the Supreme
Court. Albany & Eastern Railroad Co. v. Martell, 366 Or
715, 729, 469 P3d 748 (2020) (Albany & Eastern Railroad
Co. II), adh’d to as modified on recons, 367 Or 139, 475 P3d
437 (2020) (Albany & Eastern Railroad Co. III). In its initial
opinion, the Supreme Court reversed our ruling on the mer-
its, Albany & Eastern Railroad Co. v. Martell, 298 Or App
99, 445 P3d 319 (2019) (Albany & Eastern Railroad Co. I),
and affirmed the circuit court’s ruling establishing that the
residents of a neighborhood (defendants) had a prescriptive
easement to use a railroad crossing on plaintiff’s property
to access their homes. In Albany & Eastern Railroad Co. III,
367 Or at 141-42, the Supreme Court modified its opinion on
reconsideration and remanded the case to us to determine
an issue that we had not decided: whether the trial court
had correctly ruled that defendants were entitled to attorney
fees under ORS 20.080(2). We originally found it unneces-
sary to reach that issue in light of our conclusion that defen-
dants’ counterclaim could not succeed, which rendered their
attorney-fee claim moot. Albany & Eastern Railroad Co. I,
298 Or App at 101 n 1. Now addressing the issue on remand,
we conclude that the trial court did not err in awarding
defendants their attorney fees. Accordingly, we affirm.
We review “attorney fee awards under ORS 20.080[1]
for errors of law.” Johnson v. Swaim, 343 Or 423, 427, 172
P3d 645 (2007). We first briefly recount the underlying facts
of the parties’ dispute to give context to our analysis of the
attorney-fee issue. As we explained in our previous decision:
“Defendants are the owners and residents of eight
developed lots in a subdivision known as the Country Lane
1
ORS 20.080 provides, in part:
“(1) In any action for damages for an injury or wrong to the person or
property, or both, of another where the amount pleaded is $10,000 or less, and
the plaintiff prevails in the action, there shall be taxed and allowed to the
plaintiff, at trial and on appeal, a reasonable amount to be fixed by the court
as attorney fees for the prosecution of the action * * *.
“(2) If the defendant pleads a counterclaim, not to exceed $10,000, and
the defendant prevails in the action, there shall be taxed and allowed to the
defendant, at trial and on appeal, a reasonable amount to be fixed by the
court as attorney fees for the prosecution of the counterclaim.”
Cite as 319 Or App 816 (2022) 819
neighborhood. The Country Lane neighborhood is bounded
to the east by the South Santiam River; to the west is a
narrow strip of land owned by [Albany & Eastern Railroad
Company (AERC)]. AERC maintains and actively uses rail-
road tracks that run along its property. A road (Country
Lane) runs through the subdivision and abuts AERC’s strip
of land. There is a marked railroad crossing at the junc-
ture of Country Lane and the tracks. Defendants all use
the crossing to access their homes from the South Santiam
Highway, and they and their predecessors have done so for
many years. The Country Lane crossing, which is the sub-
ject of the parties’ dispute, is defendants’ only way to travel
between their homes and the South Santiam Highway or
any other public roadway.
“* * * * *
“* * * AERC filed this action alleging trespass[, request-
ing associated nominal damages,] and seeking to quiet title
in the disputed crossing. In their answer, defendants raised
various affirmative defenses and counterclaims, including
a [counter]claim that they were entitled to use the cross-
ing by virtue of a prescriptive easement. Following a bench
trial, the court found for defendants on that counterclaim.”
Albany & Eastern Railroad Co. I, 298 Or App at 101-03.
At trial, plaintiff argued that defendants were not
entitled to fees, because they had prevailed on an equitable
claim, rather than a legal claim, and ORS 20.080(2) autho-
rizes fees only with regard to legal claims. In rejecting that
argument, the trial court reviewed three cases that, in the
court’s view, collectively supported an award of attorney fees
under ORS 20.080(2) on defendants’ counterclaim.2
In the first case that the trial court considered,
Rose v. Rose and Freeman, 279 Or 27, 29, 566 P2d 180(1977), the plaintiff had filed suit seeking “to establish an
2
The legislature adopted ORS 20.080(2) in 1955, Or Laws 1955, ch 554,
§ 1, adding it the text that now appears in ORS 20.080(1), which was adopted
eight years earlier. Or Laws 1947, ch 366. Both subsections have been repeatedly
amended over the years to increase the maximum value of claims on which attor-
ney fees may be awarded and to modify various notice and timing provisions.
Those changes do not affect our analysis, nor do they appear to have been mate-
rial to the various decisions cited in this opinion. Thus, except where we directly
quote those other decisions, we refer throughout this opinion to the current ver-
sion of ORS 20.080.
820 Albany & Eastern Railroad Co. v. Martell
access easement across land of defendants-intervenors.”
In response, the defendant and the defendant-intervenors
“counterclaimed for injunctions to prevent plaintiffs from
using the roadway and for incidental money damages
allegedly resulting from trespasses by plaintiffs using the
roadway.” The trial court in that case denied the plain-
tiff’s request for equitable relief but granted the equitable
counterclaims, along with the incidental damages that the
defense had sought. Id. The court also awarded attorney
fees. On review, the Supreme Court summarily reversed
the attorney-fee award, holding without further discussion
that ORS 20.080 “applies only to actions at law, not suits in
equity.” Id.
The trial court next considered Barnes v. Lackner,
93 Or App 439, 762 P2d 1043 (1988), noting our holding there
that, given the legislature’s use of the term “any action” in
ORS 20.080(1), it could not have intended to limit the stat-
ute’s application to tort actions.3 See id. at 442 (“The term
‘any action’ cannot reasonably be read to mean just ‘any tort
action.’ ” (Emphases added.)). Notably, in reaching that con-
clusion, we declined to follow dictum in Colby v. Larson, 208
Or 121, 125-26, 297 P2d 1073 (1956), in which the Supreme
Court had expressly noted that ORS 20.080 “applies only
in tort actions” and had been “enacted for the purpose of
encouraging the settlement without litigation of meritorious
tort claims involving small sums.”
Finally, the trial court considered Bunnell v. Bernau,
125 Or App 440, 442, 865 P2d 473 (1993), a case in which
the plaintiff had alleged that the “defendants had interfered
with their use of a water pipeline easement over defendants’
property,” and “[t]he trial court granted plaintiffs injunctive
relief and awarded them damages for their costs of obtain-
ing an alternative water supply and other costs that they
[had] incurred as a result of the interference.” There the
3
Barnes was a contract action. At the time, ORS 20.080(1), like now, autho-
rized attorney-fee awards “[i]n any [otherwise qualifying] action for damages for
an injury or wrong to the person or property, or both[.]” ORS 20.080(1) (1987).
Consistent with our conclusion in Barnes that ORS 20.080(1) authorized attorney
fees in qualifying contract actions, 93 Or App at 442, the legislature has since
expressly authorized attorney-fee awards in such cases. Or Laws 2001, ch 542,
§ 1.
Cite as 319 Or App 816 (2022) 821
trial court denied the plaintiffs’ request for attorney fees
under ORS 20.080, not because their claims had in part
been equitable, but because, in the court’s view, the plain-
tiffs’ interest in the easement was not “property” within the
statute’s meaning. Id.On appeal, we expressly rejected that reasoning
before turning our focus to whether ORS 20.080 authorized
an attorney-fee award when the “plaintiffs sought both equi-
table relief and damages.” Id. In concluding that the plain-
tiffs could recover their fees under those circumstances, we
acknowledged that, in Rose, the Supreme Court had “held
that attorney fees under ORS 20.080 are not recoverable in
equitable proceedings, and it therefore vacated an award in
an action where both ‘equitable relief’ and ‘incidental dam-
ages’ were awarded.” Id. at 442-43. We explained, however,
that we did not read Rose “to mean that ORS 20.080 can
never apply in cases where any equitable relief is given,
along with damages.” Id. at 443 (emphases in original). We
further expressed uncertainty as to what the exact relation-
ship in Rose was between the equitable relief the defendants
had sought and the “incidental” damages awarded to them,
though we understood the damages to be attributable to a
trespass on the property at issue. Id.Ultimately, we distinguished Rose because, in the
case before us in Bunnell, the “plaintiffs sought damages
in a separate count from the one in which they asked for
equitable intervention,” and that damages claim “could have
been asserted even if no equitable claim had been made.” Id.We therefore considered it “in every sense” to be “ ‘an action
for damages’ ” under ORS 20.080. Id.4
Based on its review of those earlier decisions, the
trial court in the present case drew the following conclusions:
4
In Bunnell, 125 Or App at 443 n 1, we expressly assumed without decid-
ing that the Supreme Court’s decision in Rose survived the adoption of ORCP 2,
which abolished “[a]ll procedural distinctions between actions at law and suits in
equity * * * except for those distinctions specifically provided for by these rules,
by statute, or by the [c]onstitution of this state.” No party to this appeal suggests
that ORCP 2 has any bearing on the intended meaning or scope of ORS 20.080. In
light of our conclusion that defendants are entitled to their attorney fees, we need
not consider the possibility that ORCP 2 might otherwise render the provisions of
ORS 20.080 equally applicable to equitable claims.
822 Albany & Eastern Railroad Co. v. Martell
“The Court finds that the rulings in Rose, Bunnell, and
Barnes provide that ORS 20.080 does apply to equitable
relief sought under ORS 20.080. It follows that a party is
not limited by the statute to plead only a legal counter-
claim, but may also rely on an equitable counterclaim. The
Court’s reading of ORS 20.080(2) is that the statute is not
limited to small tort counterclaims or legal counterclaims.
Because the plaintiff’s legal claim invoked ORS 20.080(1)
and the [defendants] prevailed in the action claiming a
counterclaim that did not exceed $10,000, defendants have
met the statutory criteria for authorization of attorney fees
as pleaded and are entitled to an award of attorney’s fees.”5
The trial court further explained:
“Plaintiff’s complaint sought damages for a claim to
quiet title and trespass. Defendants prevailed on the claims
asserting a prescriptive easement defense [sic]. Because
the trespass claim is subject to ORS 20.080 and the [defen-
dants] prevailed on that claim, [d]efendants are entitled to
attorney’s fees pursuant to ORS 20.080(2).”
(Emphasis added.)
On appeal, plaintiff argues that “[d]efendants are
not entitled to an award of attorney fees because ORS 20.080
applies exclusively to small tort actions at law, not equita-
ble claims for prescriptive easement.” Plaintiff observes that
“[t]here can be no doubt” that the prescriptive easement
counterclaim that defendants succeeded on “was an action
in equity.” Thus, plaintiff argues, defendants were not enti-
tled to attorney fees under ORS 20.080(2).
Plaintiff acknowledges that defendants prevailed
on plaintiff’s trespass claim seeking damages, a claim
that, under the foregoing case law, could have supported an
award of attorney fees to plaintiff, had plaintiff prevailed
rather than defendants. However, plaintiff argues that the
“statute is not reciprocal” and that ORS 20.080(1) does not
allow for defendants to recover attorney fees for defending
against a plaintiff’s claims. Rather, plaintiff argues, the leg-
islative history and relevant case law make it clear that,
5
The trial court also rejected plaintiff’s alternative argument that, if defen-
dants were entitled to attorney fees, so too was plaintiff for prevailing on three of
defendants’ counterclaims. That ruling is not before us on appeal.
Cite as 319 Or App 816 (2022) 823
under ORS 20.080, a defendant must prevail on a counter-
claim—and not merely on one or more of the plaintiff’s
claims—to recover attorney fees. And here, because the only
counterclaim on which defendants prevailed was an equita-
ble counterclaim, ORS 20.080 does not authorize an award
of defendants’ attorney fees.
Echoing the trial court’s reasoning, defendants
counter that, because plaintiff invoked ORS 20.080(1) with
its trespass claim, they were entitled to recover attorney fees
under ORS 20.080(2) once they prevailed on a counterclaim
that they had asserted in response. We understand defen-
dants’ position to be that, to the extent that ORS 20.080’s
attorney-fee provisions are limited to what previously were
known as actions at law,6 those provisions are triggered by
the initial pleading of a legal claim, after which the plead-
ing of any counterclaim—legal or equitable—can serve as
the basis of attorney fees, so long as the counterclaim suc-
ceeds and the other requirements of ORS 20.080(2) are met.
As previously stated, we review the trial court’s
attorney-fee ruling for errors of law. Johnson, 343 Or at
427. Here the parties’ dispute requires us to determine
whether—and if so, when—ORS 20.080(2) authorizes an
award of attorney fees to a party that prevails only on an
equitable counterclaim. That, in turn, requires us to deter-
mine what the legislature most likely intended, which we do
by examining the statutory text in context. State v. Gaines,
346 Or 160, 171-72, 206 P3d 1042 (2009). Context includes
any case law construing the statute or its predecessors. State
v. Toevs, 327 Or 525, 532, 964 P2d 1007 (1998) (“Case law
interpreting the statute at issue also is considered at our
first level of analysis.”). We will also consider any available
legislative history to the extent it may be helpful, and we
may resort to canons of statutory construction if our other
efforts fail to make the statute’s meaning clear. Gaines, 346
Or at 172-73.
Applying that framework here, we ultimately
agree with the trial court’s conclusion that ORS 20.080(2)
6
As noted, 319 Or App at 821, ORCP 2 “abolished” for most purposes the pre-
vious distinction between “actions at law” and “suits in equity”; that rule further
provides that now there is only “one form of action known as a civil action.”
824 Albany & Eastern Railroad Co. v. Martell
authorized an award of attorney fees to defendants. We
note, however, that we do not reach that conclusion in quite
the same manner as the trial court. That is, we do not nec-
essarily understand Rose, Bunnell, and Barnes to “provide
that ORS 20.080 does apply to equitable relief sought under
ORS 20.080.” Rather, as we explain below, we conclude that
the structure of ORS 20.080, together with the Supreme
Court’s discussion of ORS 20.080 in a case not considered by
the trial court, Halperin v. Pitts, 352 Or 482, 287 P3d 1069
(2012), compel that understanding of ORS 20.080(2).
Starting with the text to be construed, ORS 20.080(2)
provides:
“If the defendant pleads a counterclaim, not to exceed
$10,000, and the defendant prevails in the action, there
shall be taxed and allowed to the defendant, at trial and
on appeal, a reasonable amount to be fixed by the court as
attorney fees for the prosecution of the counterclaim.”
On its face, the text of that subsection provides relatively
little guidance. On the one hand, it directs trial courts to
award prevailing defendants attorney fees for prosecut-
ing counterclaims that do “not * * * exceed $10,000,” ORS
20.080(2), and equitable claims are typically not directly
associated with dollar amounts. That could signal an inten-
tion to limit attorney-fee awards to those arising from legal
counterclaims. Similarly, the text refers to prevailing in “the
action,” a term that, at the time ORS 20.080(2) was adopted,
was associated more closely with legal claims than with
equitable claims, which commonly were pursued in “suits.”7
On the other hand, an equitable claim, which, as
noted, typically has no direct monetary value, is arguably
by definition one that does not “exceed $10,000”; in that
7
As the Supreme Court appears to have reasoned in Rose, because the text
of ORS 20.080 referred to “actions,” as opposed to “actions and suits,” it applied
only to “actions at law,” i.e., legal claims. Rose, 279 Or at 29 (“That statute applies
to actions at law, not suits in equity.”). The court had previously found support for
that distinction by comparing the statute to such statutes as former ORS 17.055
(1953), repealed by Or Laws 1979, ch 284, § 199, which allowed a defendant, at
any time before trial, to seek a compromise by tendering an offer “to allow judg-
ment or decree * * * for the sum, or the property, or to the effect therein specified.”
See Colby, 208 Or at 125-26 (distinguishing former ORS 17.055 (1953) from ORS
20.080 and calling it “a general statute applicable to every kind of case at law or
in equity”).
Cite as 319 Or App 816 (2022) 825
regard, an equitable counterclaim might well satisfy that
requirement of ORS 20.080(2). Moreover, the reference to a
defendant who prevails in “the action” could be seen as dis-
tinguishing the action as a whole from any individual counter-
claim on which an attorney-fee award might be based, argu-
ably lending some support to the trial court’s understanding
that the counterclaim need not be legal in nature, so long as
the underlying “action” in which defendants prevailed can
itself be characterized as a “legal” action.8
The context for ORS 20.080(2) includes the subsec-
tion that precedes it, ORS 20.080(1), which provides, in rele-
vant part:
“In any action for damages for an injury or wrong to the
person or property, or both, of another where the amount
pleaded is $10,000 or less, and the plaintiff prevails in the
action, there shall be taxed and allowed to the plaintiff, at
trial and on appeal, a reasonable amount to be fixed by the
court as attorney fees for the prosecution of the action * * *.”
Like ORS 20.080(2), that subsection authorizes an award
of attorney fees to a party—the plaintiff—who “prevails in
the action.” Further, unlike subsection (2), subsection (1)
has a likely referent for “the action,” namely, “any action for
damages for an injury or wrong.” See State v. Lykins, 357
Or 145, 159, 348 P3d 231 (2015) (“As a grammatical matter,
the definite article, ‘the,’ indicates something specific, either
known to the reader or listener or uniquely specified.”);
State v. Jackson, 318 Or App 370, 375, 507 P3d 727 (2022)
(“We agree that there is a correlation between ‘the’ device
specified in the second part of the sentence and ‘a’ speed
measuring device in the first part.”). Thus, as the Supreme
Court’s opinion in Rose may reflect, ORS 20.080 might be
understood to limit attorney-fee awards to circumstances in
which a plaintiff has initiated an “action for damages,” as
opposed to an action seeking only equitable relief. See Rose,
8
We note, however, that, in another context, the Supreme Court has observed
that ORS 20.080(2)’s reference to a defendant who prevails in “the action” rather
than on “the counterclaim” does not mean that the defendant must prevail on the
action as a whole to recover attorney fees. Bennett v. Minson, 309 Or 309, 314,
787 P2d 481 (1990) (legislative change in wording from “thereon”—i.e., on the
counterclaim—to “in the action” was, in court’s view, “purely semantic” and did
not require defendant to prevail on the action as a whole to recover attorney fees
related to a successful counterclaim).
826 Albany & Eastern Railroad Co. v. Martell
279 Or at 29 (holding that earlier version of statute did not
apply to “suits in equity” where defense had alleged, as part
of counterclaim for injunctive relief, entitlement to inciden-
tal damages resulting from plaintiff’s trespass, an arguably
legal component to equitable counterclaim).
Ultimately, neither the text nor that statutory con-
text provides a definitive answer to the question posed in
this case, namely, whether attorney fees are available to a
defendant who prevails on an equitable counterclaim raised
in a case in which the plaintiff’s claim or claims are legal in
nature. We therefore turn to the case law construing ORS
20.080(2) and its statutory predecessors for any further con-
textual guidance that those cases may provide, beginning
with the cases that the trial court found most instructive.
For starters, Rose does not support the trial court’s
understanding that ORS 20.080 applies to equitable relief.
Indeed, although it does so in rather broad terms and with-
out elaboration, that opinion holds that ORS 20.080 does
not apply to “suits in equity,” a holding arguably directly
at odds with the trial court’s conclusion that the statute
applies to equitable relief. See Rose, 279 Or at 29 (reversing
attorney-fee award where underlying case was not an “action
at law”). However, because, unlike plaintiff in this case, the
plaintiff in Rose sought only equitable relief, and because,
in that case, the Supreme Court did not tether its ruling to
any specific statutory language or anything specific about
either party’s pleadings, we do not find that case helpful in
determining whether the legislature’s likely intent was for
ORS 20.080(2) to permit an attorney-fee award here.9
In our own decision in Bunnell, we acknowledged
the holding in Rose “that attorney fees under ORS 20.080
are not recoverable in equitable proceedings[.]” 125 Or App
at 442. We reasoned, however, that because the plaintiff’s
claim for damages was stated in a count separate from the
9
Although we consider Rose as part of our independent assessment of the
text and context of ORS 20.080(2), we recognize that, if the Supreme Court’s deci-
sion in that case were to be on point, we would be bound by that court’s statutory
interpretation. Because, however, the plaintiff in Rose alleged only an equitable
claim, while in this case plaintiff alleged at least one legal claim, we do not view
that case to be directly on point; thus, we consider it only for any light it may shed
on the intended meaning of ORS 20.080(2).
Cite as 319 Or App 816 (2022) 827
plaintiff’s request for injunctive relief and “could have been
asserted even if no equitable claim had been made,” the
Supreme Court’s decision in Rose did not control. Id. at 443.
The holding of Bunnell is helpful insofar as it informs us
that an action may entitle a party to attorney fees under
ORS 20.080 even if the party’s claim is not exclusively a legal
claim. But because Bunnell involved neither a counterclaim
subject to ORS 20.080(2) nor, as here, a claim that was exclu-
sively equitable in nature, that opinion similarly provides
little guidance as to whether attorney fees are authorized in
this case.10
Because it is helpful to our understanding of ORS
20.080 as a whole, we turn to the Supreme Court’s deci-
sion in Halperin. In that case, the issue was whether, to be
entitled to attorney fees under ORS 20.080(2), a defendant
was required to have previously served the plaintiff with a
demand letter, which ORS 20.080(1) expressly required of
plaintiffs who themselves sought attorney fees.11 Halperin,
10
Similarly, because Barnes concerned a contract claim, and not an equitable
claim or counterclaim, we do not find it instructive as to the issue raised here.
11
The following provisions of ORS 20.080 impose that obligation on plaintiffs
seeking to recover their attorney fees:
“(1) In any action for damages for an injury or wrong to the person or
property, or both, * * * [if] the plaintiff prevails in the action, there shall be
taxed and allowed to the plaintiff * * * a reasonable amount to be fixed by the
court as attorney fees for the prosecution of the action * * * if the court finds
that written demand for the payment of such claim was made on the defen-
dant * * * not less than 30 days before the commencement of the action * * *.
“* * * * *
“(3) A written demand for the payment of damages under this section
must include the following information, if the information is in the plaintiff’s
possession or reasonably available to the plaintiff at the time the demand is
made:
“(a) In an action for an injury or wrong to a person, a copy of medical
records and bills for medical treatment adequate to reasonably inform the
person receiving the written demand of the nature and scope of the injury
claimed; or
“(b) In an action for damage to property, documentation of the repair of
the property, a written estimate for the repair of the property or a written
estimate of the difference in the value of the property before the damage and
the value of the property after the damage.
“* * * * *
“(5) A plaintiff may not recover attorney fees under this section if the
plaintiff does not comply with the requirements of subsections (3) and (4) of
this section.”
828 Albany & Eastern Railroad Co. v. Martell
352 Or at 484. There the defendants had prevailed on a
counterclaim for trespass, but we held that they were not
entitled to attorney fees under ORS 20.080(2). Id. at 485. We
reached that conclusion based on Bennett v. Minson, 309 Or
309, 315, 787 P2d 481 (1990), where the Supreme Court had
stated that “the procedural requirements of demand and
tender contained in subsection (1) apply to subsection (2),
which is silent on those matters.” Halperin, 352 Or at 485(describing our ruling). Notwithstanding that statement in
Bennett, which the Halperin court determined to be dictum,
id. at 494, the Halperin court reached a different conclusion
after construing ORS 20.080 for itself, id. at 486-91.
Starting with the statutory text, the court observed
that “[s]ubsection (1) plainly applies to plaintiffs only * * *
[and] [s]ubsection (2) plainly applies to defendants only.”
Id. at 487. Further, the court emphasized that “[s]ubsection (2)
makes no mention of a prelitigation demand requirement
[and] [i]t supplies no phrasing that reasonably could be con-
strued to impose such a requirement.” Id. (explaining that,
as enacted by the legislature in 1947, the text now codified
(with amendments not relevant here) at ORS 20.080(1) stood
alone and permitted only plaintiffs to recover their attorney
fees).
The court then noted that the legislative history
regarding the enactment of ORS 20.080(2) eight years later
“is sparse” and that nothing in it suggested that the leg-
islature had intended to impose a demand requirement on
defendants. Id. at 488 (discussing Or Laws 1955, ch 554, § 2,
later codified as ORS 20.080(2)). The court further noted
that in 1953, the legislature had considered, at the recom-
mendation of the Oregon State Bar, amending what is now
ORS 20.080(1) by weaving in much of what now appears in
ORS 20.080(2). Id. at 488-89. The proposed, but ultimately
rejected, language provided:
“Section 1. In any action for damages, or counter claim
for damages, for any injury or wrong to the person or prop-
erty, or both, of another where the amount [recovered] in
controversy is [five hundred dollars $500.] one thousand dol-
lars ($1000.00) or less, there shall be taxed and allowed to
the plaintiff, or a counter-claiming defendant, as part of the
Cite as 319 Or App 816 (2022) 829
costs of the action, a reasonable amount to be fixed by the
court as attorney fees for the prosecution of such action if
the court shall find that written demand for the payment of
such claim was made on the defendant or plaintiff not less
than 10 days before the commencement of such action; pro-
vided, that no attorney fees shall be allowed to the plain-
tiff or defendant if the court shall find that the defendant,
or plaintiff tendered to the plaintiff, or defendant, prior to
the commencement of such action, an amount not less than
the damages awarded to the plaintiff or defendant in such
action.”
Id. (quoting Oregon State Bar, Minimum Fee Schedules, 1953
Committee Reports 14; alterations in quoted source). That
failed proposal supported the Supreme Court’s conclusion in
Halperin that, as ultimately enacted and codified, the pro-
visions of subsection (1) and subsection (2) imposed distinct
obligations on plaintiffs and defendants. See Halperin, 352
Or at 491 (“[N]othing in the wording of ORS 20.080 suggests
that the legislature intended the prelitigation demand-letter
requirement of subsection (1) to apply to defendants under
subsection (2). In fact, the textual evidence is directly to the
contrary.”); see also id. at 494 (declining to follow dictum in
Bennett that demand-letter requirement in subsection (1)
equally applied to subsection (2), which was silent on the
matter).
Halperin informs our understanding of ORS 20.080,
ultimately leading us to conclude that a defendant who suc-
cessfully prosecutes an equitable counterclaim in an action
otherwise subject to that section is entitled to recover attor-
ney fees under ORS 20.080(2). The Halperin court appears to
have viewed the legislature’s rejection of the Bar’s proposal—
followed by the legislature’s adoption of what is now subsec-
tion (2) in the next legislative session—as indicating that
the legislature intended for plaintiffs to be subject to dis-
tinct requirements to qualify for attorney fees under ORS
20.080, which it did not intend to require of defendants; or, if
it did intend to apply them to defendants, it failed to accom-
plish that goal in enacting ORS 20.080(2). See Halperin, 352
Or at 494-95 (A court may not “resort to legislative history
as a justification for inserting wording in a statute that the
legislature, by choice or oversight, did not include.”).
830 Albany & Eastern Railroad Co. v. Martell
Contrasting subsections (1) and (2), then, as the
court did in Halperin, we note that subsection (2) does not
specify that a defendant’s counterclaim must be one “for
damages” to qualify for attorney fees. That is, unlike sub-
section (1), which contemplates a plaintiff prevailing in an
“action for damages” (i.e., an “action at law”), where “the
amount pleaded is $10,000 or less,” subsection (2) speci-
fies only that a defendant’s counterclaim “not * * * exceed
$10,000.” That distinction suggests that, even if ORS 20.080
as a whole is not invoked unless the plaintiff has asserted
a legal claim—as the Supreme Court appears to have held
in Rose, 279 Or at 29—a defendant’s prosecution of an equi-
table counterclaim neither converts the action to a “suit in
equity” nor precludes an award of attorney fees to the defen-
dant, so long as the dollar value of the counterclaim, if any,
does “not * * * exceed $10,000.” ORS 20.080(2).
The language that the legislature rejected in 1953
provides another clue that it intended for the statutory
scheme to work that way, with the plaintiff’s filing invoking
the statute, and with each parties’ claims or counterclaims
being subject to disqualification only if they exceeded a cer-
tain value. At the time, ORS 20.080 (1953) provided that,
“[i]n any action for damages for an injury or wrong to the
person or property, or both, of another where the amount
recovered is $500 or less,” a plaintiff may recover attorney
fees. (Emphasis added.) The language that the legislature
declined to adopt would have, among other things, substi-
tuted “in controversy” for “recovered” in the existing stat-
ute. Although that change was rejected, the legislature’s
subsequent adoption of “pleaded” in place of “recovered”
appears to similarly reflect the view that a legal dispute’s
overall value, something largely under the control of the
plaintiff who initiates the case, should be what dictates the
potential availability of attorney fees. See Colby, 208 Or at
126 (noting legislative goal of “encouraging the settlement
without litigation of meritorious tort claims involving small
sums”). Thus, the legislature invited plaintiffs to invoke
ORS 20.080 by keeping their claims low, after which they
would be entitled to attorney fees if they were ultimately to
prevail.
Cite as 319 Or App 816 (2022) 831
Nothing about the later adoption of an attorney-fee
provision related to counterclaims suggests that the legisla-
ture intended to alter that scheme. That is, unless a defen-
dant takes part of the case out of ORS 20.080 by pleading
a counterclaim seeking more than $10,000 in damages, it
remains a small tort claim, whether the defendant pleads
legal claims or exclusively equitable ones. For that additional
reason, we are not persuaded that the legislature intended
to preclude defendants from recovering attorney fees under
ORS 20.080 if they successfully defeated a plaintiff’s legal
claim by pursuing an equitable counterclaim, as that could
well frustrate the legislature’s overall objective of encourag-
ing the settlement of such cases. See Halperin, 352 Or at 495(“It is, of course, an ancient maxim that remedial statutes
are to be construed liberally to effectuate the purpose for
which they were enacted.”).
Here, the parties do not dispute that plaintiff’s
action for trespass and to quiet title was an action “for
damages for an injury or wrong to the person or property,
or both, of another.” ORS 20.080(1). It is also undisputed
that the equitable counterclaim on which defendants pre-
vailed was not one that “exceed[ed] $10,000.” ORS 20.080(2).
Accordingly, the trial court did not err in awarding attorney
fees to defendants.12
Affirmed.
12
In light of our conclusion that defendants’ success on their equitable counter-
claim entitled them to an award of attorney fees under ORS 20.080(2), we need
not further consider the trial court’s alternative rationale that, because defen-
dants had prevailed on plaintiff’s trespass claim, which itself was legal in nature,
they were entitled to fees.