368 P.3d 66
Or. Ct. App.2016Background
- Weitman Excavation (subcontractor) submitted a bid that CPM Development (general contractor) incorporated; CPM later presented a subcontract with new terms including a bonding requirement and an arbitration clause, which Weitman never signed and then withdrew from the project.
- CPM initiated arbitration claiming breach; Weitman contested arbitrability and filed a declaratory judgment action in court seeking a declaration that no binding arbitration agreement existed and petitioned to stay/compel arbitration; the trial court took the motion to compel under advisement.
- Arbitration proceeded while the trial court’s ruling was pending; the arbitrator awarded CPM damages plus attorney fees; CPM later petitioned to confirm the award in court and Weitman counter-petitioned to vacate the award for lack of agreement to arbitrate.
- The trial court ruled no contract/agreement to arbitrate existed, vacated the arbitration award, and granted Weitman summary judgment; CPM did not appeal that judgment.
- Weitman sought attorney fees under ORS 36.715(3) (including fees incurred in arbitration) and ORS 20.105, plus an enhanced prevailing-party fee under ORS 20.190(3); the trial court awarded a portion of fees including fees incurred in arbitration and a $3,000 enhanced fee, but denied ORS 20.105 fees.
- On appeal, the court addressed (1) whether ORS 36.715(3) authorizes fees for work done in arbitration, and (2) whether the enhanced prevailing-party fee was legally supportable given the trial court’s conflicting findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 36.715(3) authorizes awarding attorney fees for work performed in the arbitration itself | ORS 36.715(3) authorizes reasonable attorney fees related to arbitration matters, including fees incurred in the arbitration | ORS 36.715(3) is limited to fees incurred in post-award judicial proceedings ("incurred in a judicial proceeding") and does not reach private arbitration fees | Reversed award of $27,035.50: statute permits fees only for judicial proceedings after an award, not fees incurred in arbitration itself |
| Whether the trial court properly awarded an enhanced prevailing-party fee under ORS 20.190(3) based on defendant’s alleged recklessness in pursuing arbitration | Enhanced fee appropriate because CPM was reckless in forcing arbitration despite a good-faith disagreement about arbitrability, imposing unnecessary expense on Weitman | The trial court’s own findings that CPM’s positions were objectively reasonable and made in good faith are inconsistent with a finding of recklessness; enhanced fee thus unsupported | Vacated and remanded for reconsideration: trial court’s recklessness finding conflicted with its objective-reasonableness finding, so award was legally erroneous; remand allows reconsideration under ORS 20.190(3) factors |
| Whether Weitman was entitled to fees under ORS 20.105 (cross-appeal) | Weitman sought fees under ORS 20.105 for claims lacking an objectively reasonable basis | CPM argued its positions were objectively reasonable, so ORS 20.105 fees inappropriate | Cross-appeal denied: trial court’s denial of ORS 20.105 fees was affirmed |
Key Cases Cited
- State v. Gaines, 346 Or. 160 (interpretive methodology; look to statutory text and legislative intent)
- Lehman v. Bradbury, 334 Or. 579 (courts must determine legislative intent when awarding statutory attorney fees)
- Harrell v. Dove Mfg. Co., 234 Or. 321 (arbitration occurs outside of judicial proceedings)
- Bonds v. Farmers Ins. Co., 349 Or. 152 (agreement to arbitrate not required to institute arbitration proceedings)
- Niman & Niman, 206 Or. App. 400 (standard of review for legal conclusions about fee entitlement)
- Shumake v. Foshee, 197 Or. App. 255 (discretionary nature of enhanced prevailing-party fee review; factual findings reviewed for evidence)
- Mulligan v. Hornbuckle, 227 Or. App. 520 (trial court may consider expense of predicate proceedings, including arbitration, under ORS 20.190(3)(h))
- Mantia v. Hanson, 190 Or. App. 412 (vacating enhanced fee where award rested on erroneous conclusion about objective reasonableness)