454 P.3d 787
Or. Ct. App.2019Background
- Mindful Insights (plaintiff) provided consulting services to VerifyValid (defendant) after exchanging a Master Consulting Services Agreement (MCSA) and subsequent communications; defendant never signed the MCSA.
- Plaintiff invoiced $46,818.74 (November invoices) and sought payment for a total alleged debt of $88,818.74; defendant did not pay.
- Plaintiff sued on four theories: breach of express contract (MCSA), breach of implied-in-fact contract, quantum meruit/unjust enrichment, and fraud.
- Jury verdict: plaintiff lost on breach of the express MCSA and fraud; plaintiff won on breach of an implied contract ($46,818.74) and on quantum meruit ($56,000).
- At posttrial, plaintiff sought attorney fees under the MCSA; the trial court treated the express and implied-contract theories as a single breach-of-contract claim, found plaintiff the prevailing party, and awarded $260,000 in attorney fees and costs to plaintiff and denied defendant’s fee request.
- On appeal, the court affirmed that the express and implied-in-fact theories were alternative proofs of a single contract claim (so plaintiff was the prevailing party on the contract claim) but reversed the fee award because the jury rejected that the MCSA terms applied and there was no evidence the parties had agreed to an attorney-fee term by conduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who is the “prevailing party” when plaintiff pleads breach of express contract and breach of implied-in-fact contract as separate counts based on the same facts? | Mindful: express and implied theories are alternative proofs of the same contract claim; plaintiff prevailed on the contract claim. | VerifyValid: the theories were separate claims; defendant prevailed on the express-contract claim and thus is entitled to fees under the MCSA/statute. | The court held the theories were alternative ways to prove a single breach-of-contract claim; plaintiff was the prevailing party on that claim. |
| Whether the implied-in-fact contract included the MCSA’s attorney-fee provision (entitling plaintiff to contractual attorney fees). | Mindful: the jury found an implied contract and that acceptance by conduct incorporated the MCSA terms, including the fee clause. | VerifyValid: jury rejected that the MCSA formed the parties’ express agreement; no evidence shows conduct establishing an agreement to the MCSA’s fee term. | The court held there was no evidentiary basis to infer the attorney-fee term from conduct; fee award to plaintiff was erroneous and reversed. |
| Whether defendant was entitled to attorney fees for defending the express-contract claim under ORS 20.083/20.096. | Mindful: not applicable because plaintiff prevailed on the contract claim as a whole. | VerifyValid: it prevailed on the express-contract theory and should recover fees for that claim. | The court rejected defendant’s claim: because the express and implied theories were a single claim and plaintiff prevailed on that claim, defendant was not a prevailing party for contract-fee statutes. |
Key Cases Cited
- Rose v. Wollenberg, 36 Or 154 (Or. 1899) (distinguishes express vs. implied-in-fact contracts as differences of proof, not substance)
- Staley v. Taylor, 165 Or App 256 (Or. Ct. App. 2000) (express and implied-in-fact contracts are equivalent in legal effect; differ only by mode of proof)
- Owen v. Bradley, 231 Or 94 (Or. 1962) (implied-in-fact contract arises where acts warrant that conclusion)
- Mount Hood Cmty. Coll. v. Federal Ins. Co., 199 Or App 146 (Or. Ct. App. 2005) (quantum meruit often pleads as alternative to breach-of-contract; alternative theories are not separate fee-bearing claims)
- Kashmir Corp. v. Patterson, 289 Or 589 (Or. 1980) (parties may plead alternative contract and quasi-contract theories)
- Carlson v. Blumenstein, 293 Or 494 (Or. 1982) (discusses methods for identifying prevailing party prior to ORS 20.077)