King v. NEVERSTILL ENTERPRISES, LLC
240 Or. App. 727
Or. Ct. App.2011Background
- Neverstill Enterprises, LLC purchased Fernando's Hideaway restaurant for $575,000; two promissory notes and a guaranty by Reierson were part of the agreement.
- Plaintiff Laura King was a member of Fernando's and became sole member in 2002; she asserted breach of the purchase agreement against Neverstill and Reierson.
- Fernando's was administratively dissolved in August 2003; its certificate of formation was cancelled in August 2005; no timely assignment of rights occurred prior to cancellation.
- Plaintiff sued in 2007 for breach of contract; trial court dismissed her claim with prejudice under ORCP 54 B(2) for lack of real party in interest.
- Defendants sought attorney fees under ORS 20.083 and costs under ORCP 68 B; the court denied both.
- On appeal, the court vacated dismissal of fees and costs, concluding ORS 20.083 applies and ORCP 68 B governs costs on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ORS 20.083 authorize attorney fees when the prevailing party defeated the claim by establishing lack of real party in interest? | King was not the contract party; statute should not apply. | Prevailing party status under ORS 20.083 should allow fees regardless of the specific defense. | Yes; ORS 20.083 applies and prevailing defendants entitled to fees. |
| Are costs recoverable where the dismissal was involuntary under ORCP 54 B? | ORCP 54 B does not provide costs; the court lacked authority. | ORCP 68 B governs costs for prevailing parties and applies on remand. | Yes; costs are recoverable under ORCP 68 B, remand for costs. |
Key Cases Cited
- Golden West Insulation v. Stardust Investment Co., 47 Or.App. 493 (Or. App. 1980) (broad reciprocity under ORS 20.096)
- Bodenhamer v. Patterson, 278 Or. 367 (Or. 1977) (contractual attorney fees cannot be recovered when the contract is rescinded)
- Care Medical Equipment, Inc. v. Baldwin, 331 Or. 413 (Or. 2000) (void covenants bar fee recovery when only source of fees is void provision)
- Dess Properties v. Sheridan Truck & Heavy Equipment, 220 Or.App. 336 (Or. App. 2008) (extent of ORS 20.083 scope and 'void' contract notion)
- Clapper v. Oregon State Police, 228 Or.App. 172 (Or. App. 2009) (prevailing party and costs under ORCP 68 B)