Johnson v. O'Malley Bros. Corp.
397 P.3d 554
Or. Ct. App.2017Background
- Plaintiff sued former employer for unpaid wages and an unlawful withholding (a $126.95 paycheck deduction for a traffic fine); matter went to court-annexed arbitration.
- Arbitrator awarded plaintiff $349.30 for unpaid August wages and $200 in liquidated damages under ORS 652.615 for unlawful withholding; arbitrator found the deduction was made with plaintiff’s knowledge and benefit but without written authorization.
- Plaintiff sought $33,732 in attorney fees under mandatory-fee statute ORS 652.200(2) (wage claims) and discretionary-fee statute ORS 652.615 (unlawful withholding); arbitrator awarded half ($16,866) after applying ORS 20.075 factors.
- Defendant filed exceptions to the arbitrator’s fee award to the trial court under ORS 36.425(6); the trial court affirmed the arbitrator, entering judgment including the fee award.
- On appeal defendant challenged (inter alia) the standard of review, entitlement to mandatory fees under ORS 652.200(2) (arguing lack of pre-suit written notice and willful breach), and the propriety of awarding fees under ORS 652.615 given the arbitrator’s good-faith findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review for trial court review of arbitrator’s fee award | Trial court lacked discretion to modify if arbitrator applied law correctly; appellate review limited to legal error on entitlement and abuse of discretion on amount | Trial court should have reviewed arbitrator’s fee award for legal error, not abuse of discretion | Any error in trial court’s choice of standard was not reversible; appellate review proceeds by law for entitlement and abuse of discretion for discretionary aspects |
| Entitlement to mandatory fees under ORS 652.200(2) (notice requirement) | Plaintiff contends notice was adequate and arbitrator/trial court rejected defendant’s challenge | Defendant contends plaintiff’s counsel failed to give written notice of the specific August wage claim, so mandatory fees are disallowed | Court rejected defendant’s notice argument: defendant bore burden to show the exception (unreasonable failure to give written notice) and record was insufficient to compel that finding |
| Awarding fees under ORS 652.615 for unlawful withholding | Plaintiff sought fees; arbitrator awarded half of requested fees after applying ORS 20.075 factors | Defendant argued award was abusive because arbitrator found the deduction was made at plaintiff’s request, for plaintiff’s benefit, and in good faith (technical violation) | Reversed: abuse of discretion to award fees under ORS 652.615 because arbitrator’s findings (good-faith, plaintiff-benefit, technical error) and lack of countervailing ORS 20.075 factors weigh against fees |
| Remedy and remand for attorney-fee resolution | Plaintiff: fee award affirmed as entered | Defendant: trial court must reduce/deny fees or segregate amounts tied to each claim and reapply ORS 20.075 | Trial court’s fee award reversed in whole and remanded to recalculate fees consistent with opinion (segregate mandatory vs discretionary components and apply ORS 20.075) |
Key Cases Cited
- Williamson v. Government Employees Ins. Co., 247 Or. App. 48 (discusses limits on trial court discretion to modify arbitrator fee awards)
- Rivera-Martinez v. Vu, 245 Or. App. 422 (addresses appellate review scope for arbitrator fee awards)
- Belknap v. U.S. Bank Nat’l Ass’n, 235 Or. App. 658 (construing "written notice of the wage claim" exception in ORS 652.200(2))
- Barber v. Green, 248 Or. App. 404 (standard: legal error for entitlement; abuse of discretion for fee amount under ORS 20.075)
- Clackamas County Assessor v. Village at Main Street, 352 Or. 144 ("may" in fee statutes confers discretion)
- Swarens v. Dept. of Revenue, 320 Or. 669 (no fee award when government reasonably but erroneously interprets statute)
- Quick Collect, Inc. v. Higgins, 258 Or. App. 234 (appellant’s duty to provide adequate record on appeal)