249 P.3d 1265
Or.2011Background
- Curry County Title (CCT) and Menasha Forest Products contracted an escrow agreement that allows recovery of reasonable attorney fees if CCT prevails.
- Transnation Title Insurance Co. provided title insurance to the escrow, with CCT as agent and Transnation as principal under a pre-2004 agency agreement indemnifying CCT for losses, including attorney fees.
- In 2004, dispute arose over a title error in a timber sale involving Golden Gate Trust; plaintiff sued CCT and Transnation for breach of contract, seeking declaratory relief and possibly attorney fees.
- Transnation paid the attorney fees charged by the shared counsel pursuant to the agency agreement; the payment flow raised questions about who incurred the fees for purposes of the escrow contract.
- Trial court awarded $31,449.85 to defendants; Court of Appeals reduced it to $2,500 based on the agency agreement's fee indemnity cap.
- Supreme Court of Oregon held that Transnation’s payment did not affect CCT’s entitlement under the escrow contract and that Transnation may recover its fees as a judgment creditor; Court of Appeals’ reduction was reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does payment of fees by a third party affect incurrence under the escrow contract? | Transnation payment negates CCT's incurrence of fees. | Incurrence is independent of who pays; CCT incurred the fees. | Payment by Transnation does not affect incurrence; CCT incurred fees. |
| Are CCT's fees recoverable under the escrow contract despite Transnation's payment? | Agency cap reduces recoverable amount or negates recovery. | Escrow contract allows full reasonable fees incurred, regardless of who pays. | CCT is entitled to the full $31,449.85 incurred. |
| Is Transnation entitled to attorney fees as a judgment creditor? | Transnation is not a party to the escrow contract and cannot recover. | Agency relationship makes Transnation a beneficiary with entitlement to the fee award. | Transnation properly awarded attorney fees as a judgment creditor. |
| Does ORS 20.096(1) apply to bar or limit recovery for a nonparty to the contract? | Reciprocity does not extend to nonparties like Transnation. | Statutory reciprocity supports recovery of fees by the prevailing party, even if not named in the contract. | ORS 20.096(1) principles support fee recovery in the circumstances; not controlling to deny recoveries here. |
Key Cases Cited
- White v. Jubitz Corp., 347 Or. 212 (2009) (meaning of incur includes becoming liable for charges, even if not paid)
- Colby v. Gunson, 349 Or. 1 (2010) (plain meaning of 'attorney fees' in context of awards)
- Domingo v. Anderson, 325 Or. 385 (1997) (distinguishing 'attorney fees' incurred from payment by third parties)
- Jewell v. Triple B. Enterprises, 290 Or. 885 (1981) (reciprocity of recovery under ORS 20.096(1))