Seida v. West Linn-Wilsonville School District 3 J T

Citations: 169 Or. App. 418; 9 P.3d 150; 2000 Ore. App. LEXIS 1435Docket: DCV 98-8068; CA A105754

Court: Court of Appeals of Oregon; August 30, 2000; Oregon; State Appellate Court

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Plaintiff appealed a supplemental money judgment that awarded enhanced prevailing party fees to the defendants under ORS 20.190(3) and ORS 19.205(2)(c), following the trial court's dismissal of his claims via a directed verdict. Plaintiff, who owns farmland in Wilsonville, had his land partially taken for public use in a 1996 condemnation case involving the West Linn-Wilsonville School District. He filed suit in 1998 against various defendants, alleging that improvements made to Day Road by the school district and others obstructed his access and involved unauthorized use of his property. At trial, the parties agreed the central issue was who should bear the cost of removing a curb blocking his access. The trial court ruled that the final judgment from the condemnation case was key to this determination, with plaintiff arguing it preserved his access rights, while defendants disagreed. After plaintiff presented his case, the court granted a directed verdict in favor of the defendants, dismissing plaintiff's claims with prejudice and ordering the school district to recover costs and prevailing party fees. Despite plaintiff's contention that the judgment should not include a ruling on prevailing party fees, the court later awarded $3,000 to the school district and $2,000 to the other defendants as enhanced prevailing party fees. The school district was identified as the sole judgment creditor in the ruling.

The trial court issued a supplemental money judgment regarding defendants' request for enhanced prevailing party fees under ORS 20.190(3). The court found that: (1) the plaintiffs' claim was not objectively reasonable; (2) a larger fee would not discourage good faith claims; and (3) it could deter future meritless claims. Consequently, the West Linn-Wilsonville School District was awarded $3,000, while other defendants received $2,000 each for enhanced prevailing fees. The court also ruled that these defendants have a judgment against plaintiff Kent Seida for their enhanced fees and costs as per ORCP 68.

Plaintiff Kent Seida raised five assignments of error related to the award of these fees. ORS 20.190 details the rights of prevailing parties to recover costs, including specific amounts based on the nature of the judgment, and allows for the court to award up to an additional $5,000 based on factors such as the conduct of parties, objective reasonableness of claims, and potential deterrent effects on future claims.

Nonprevailing parties are jointly liable for prevailing party fees, and a court is restricted to awarding only one prevailing party fee to a prevailing party and one against a nonprevailing party, regardless of the number of parties involved. The plaintiff argues that the trial court violated ORS 20.190(4) by awarding multiple enhanced prevailing party fees, asserting that there were two separate awards benefiting different defendants, which the statute prohibits. The plaintiff maintains that since the judgment awarded prevailing fees solely to the district, the court lacked authority to award enhanced fees to other defendants. 

Defendants counter that the plaintiff's argument is not preserved per ORAP 5.45(2) because it was not raised in the trial court. However, defendants previously contended that only the district should receive an enhanced fee, indicating the plaintiff was not required to foresee the court's sua sponte awards to other defendants. They argue that the Circuit Court awarded one enhanced prevailing party fee of $5,000, the statutory maximum, allocated among six prevailing defendants, which aligns with statutory requirements. 

The interpretation of ORS 20.190(4) involves examining its text and context. Subsection (1) mandates a fee for the prevailing party, with a higher fee possible under subsection (2) for cases involving money damages, and subsection (3) allows for an additional $5,000 fee at the court's discretion. Subsection (4) addresses scenarios with multiple parties, stating that multiple nonprevailing parties are jointly liable for fees, and prohibits more than one prevailing party fee for either party. The statute's language is clear in its prohibitions, but ambiguity remains regarding whether a single fee can be awarded on behalf of multiple prevailing parties. The plaintiff argues for a singular fee to benefit one prevailing party, while the defendants suggest that multiple judgments can be entered, totaling the maximum allowable amount.

The legislative history of ORS 20.190 indicates that the statute was amended in 1995 as part of a broader tort reform initiative. Subsections (2) through (7) were added following initial discussions, with a joint subcommittee conducting public meetings on the proposed changes. Concerns regarding the clarity of subsection (4) arose during these discussions, particularly about its stipulation that a court may not award more than one prevailing party fee to a prevailing party. An amendment was subsequently adopted to clarify that this limitation applies regardless of the number of non-prevailing parties. 

During the discussions, it was established that if a party loses a lawsuit in circuit court, they would be liable for a mandatory fee of $500, with the possibility of a discretionary increase up to $5,000, which could be split among multiple defendants. The legislative intent was to ensure fairness by limiting the total prevailing party fee to one, irrespective of the number of defendants, thereby preventing a non-prevailing party from facing excessive penalties due to multiple prevailing parties. The bill passed through both the Senate and House without substantive changes to this provision and became law, reflecting the legislature's aim to mitigate risks for parties involved in litigation.

The legislature intended that courts or parties could divide awarded amounts among prevailing parties. The trial court correctly split the enhanced prevailing party fee between the school district and other defendants without violating ORS 20.190(4). However, the Circuit Court erred in failing to provide adequate factual findings under ORS 20.190(3), instead relying on generalized legal conclusions. The court’s findings included that the plaintiff's claim lacked objective reasonableness, that a larger fee would not deter good faith claims, and that it might deter meritless claims. The appellate review, guided by McCarthy v. Oregon Freeze Dry, Inc., requires findings to be clear enough for meaningful review. In this case, the appellate court found the trial court's conclusions too vague to determine the basis for its decisions regarding the plaintiff’s claims and the applicability of statutory grounds for fees. As a result, the enhanced prevailing party fee was vacated and remanded for further findings. Other assignments of error and arguments from the defendants were not addressed. The supplemental judgments awarding $500 to each defendant, apart from the district, were not contested in the appeal, and the court provided no opinion on their viability for execution. The plaintiff's appeal was limited to the supplemental money judgment.